1.0.
Introduction
The
nations of Latin America, Asia, and Africa have been characterized by under-development
for decades. Todaro (2012) defines underdevelopment as “an economic situation
characterized by persistent low levels of living in conjunction with absolute
poverty, low income per capita, low rates of economic growth, low consumption
levels, poor health services, high death rates, high birth rates, dependence on
foreign economies, and limited freedom to choose among activities that satisfy
human want” (Todaro, 2012:122). Most post-colonial leaders in Latin America
Asia and Africa and some scholars have always attributed this condition to
external factors mostly the exploitive nature of International capitalist
system. However, a single factor is not sufficient to explain underdevelopment.
Underdevelopment is multifactorial. This paper examines the underdevelopment of
developing nations from a dependency theoretical framework using the case
studies of Malawi and Botswana. It argues that much as external forces have
played a role in the underdevelopment, to a greater extent underdevelopment is
an internally driven phenomenon.
2.0.
Dependency Theory: An Overview
Dependency
is a situation in which the “economy of a certain group of countries is
conditioned by the development and expansion of another economy, to which their
own is subjected” (Dos Santos 1991: 145). This relation favors some nations at
the detriment of the other and limits the growth possibilities of subordinate
economies. In dependency school there is a difference between underdevelopment
and un-development. Underdevelopment is understood as a condition in which
resources are actively used, but used in a way which benefits dominant states
and not the poorer states in which the resources are extracted (Feraro 1996:3).
This status-quo is maintained through the operations of international
capitalism which has perpetuated the dependency of the developing nations
(satellite/periphery) to the developed nations (metropolis/center). Even though
the dependency theory is not a unified theory, there a number of core propositions
which are common these are; International division of labour, class distinction
and global capitalism serviced through International Monetary Fund (IMF), World
Bank and to some extent western education.
In
the international division of labour, developed nations have condition the
underdeveloped nations to be providers of raw materials and cheap labour. This
explains why developing countries are characterized by resource extraction
economies, and agricultural production. On the other hand, developed economies
have capital intensive industries; they buy raw materials at very low prices,
add value and sell them back at very expensive prices and gain the surplus. Amin
argues that the accumulation of profits/surplus in developed countries does not
result from virtuous savings as often claimed, it result from the dispossession
of developing nations surplus (Amin 2011: 52). This explains the low levels of
Gross National Savings in poor countries.
The
international division of labour leads to disarticulated economies in in the
periphery. In disarticulated economies growth in one sector of the economy does
not stimulate growth in other sectors. In articulated economies growth in one
sector stimulate growth in other sectors (Amin in Jeffrey 2012; 55). Economic disarticulation
is due
to foreign economic
control, it results to the development of
those economic activities that
benefit core capitalists. Thus, the international division
of labour places developing countries in the realm of raw material production
under the guise of comparative advantage. Malawi for instance heavily relies on
tobacco for its revenues and prices are set by international buyers. This
metropolis-satellite structure allows the development of the developed nations and
the underdevelopment of the underdeveloped nations (Frank 1972:2). With the
vast natural resources in the developing nations, the Centre-Periphery
relations are maintained for further capital expansion (Amin, 1992:12).
Dependency
results into underdevelopment through elite complicity. The elites in the
periphery/ satellite forms part of the capitalist system and knowingly or
unknowing advances the interest of capitalists of the Metropolis/Centre states.
Thus, the elites or the capitalists in poor agreement have common objectives
with the elites in rich countries and both benefit from this prevailing
dependency condition (Jeffrey, 2012:15).
Global
capitalism is also advanced by the developed countries and this is serviced by
financial institutions such as the World Bank, International Monetary fund and
the other international Aid agencies. Loans given are attached with exorbitant
interests and returns accrued from investments from such loans is just used to
service back the debt and therefore no progress is made in national
development. Further, investments by multinational corporations in developing
countries do benefit the rich countries as profits are repatriated back (Jeffrey
2012:56).
3.0.Beyond
Dependency Theory Explanation: A case study of Botswana and Malawi
The
dependency theoretical framework, though intellectually appealing is not
sufficient enough to explain the development and under-development Botswana and
Malawi respectively. Some post-colonial countries such as Mauritius, Botswana, Namibia,
Singapore, and North Korea have made strides towards economic and social
development. On the other hand, countries like Zimbabwe, Malawi, and most of
the sub-Saharan Africa, Asia and Latin America counties are struggling to make
a breakthrough into the developed nation’s camp. This reveals that the search
for causes of underdevelopment is beyond external factors. This is evident when
you examine the case of Malawi and Botswana.
3.1. Malawi
Malawi a sub-Sahara
Africa country attained its independence from British rule in 1964. By 1980
Malawi had a GDP of $800 million and a GDP per capita of $133 and an export
base of cotton, coffee, and tobacco accounting to about $278.4 million (CIA
World Fact-book 1982:147). Since independence it has relied heavily on agriculture
with tobacco being a major export up to date. Its leaders have failed to take
ambitious initiatives to modernize its agriculture base and diverse its economy
to enable it withstands economics shock due price fluctuations of agriculture
products. Despite receiving huge amounts of development aid for almost four
decades little has changed. The real GDP still remains low, $2758 million and a
real GDP per capita of $185 (Africa Economic Indicators 2013), hence still in
the category of lower income countries. Malawi is facing serious challenges
achieving the Millennium Development Goals (MDGs). Poverty remains high,
characterized by low standards of living, high mortality rate and food
insecurity. With a lowest Human Development Index (HDI) of 0.418 ranking 170
out of 180 countries (Human Development Report 2013:146).
3.2. Botswana
Botswana attained independence from
British rule in 1966. In 1980 it had a GDP of $856.3 million (CIA World fact
book 1982:26) and a lowest GDP per capita of $70 in 1966 (Lewin, pg1). It had a poor communication system with no
any railroad and only a few kilometers of tar roads. Despite all this, Botswana
has emerged as one of the African Middle income countries with a real GDP of
$8,404 million and real GDP per capita of $4190 (Africa Development Indicators
2012/13). Even though income inequality remains high, measuring a GINI
coefficient of 0.62, its Human Development Index of 0.634, ranking 119 out 180 nations signifies average
social improvement. The communication systems have improved remarkably and poverty
gap ratio and illiteracy rate have greatly reduced. Botswana. Development aid
has been declining overtime.
Though
some may argue that development in Botswana has been accelerated due to the
presence of mineral mining, such a factor is not sufficient to paint the whole
picture of development. Given the fact that some countries with more mineral
and oil wealth have failed to achieve the same level of development then
reasons for Botswana success have to be found beyond and Malawi’s failure to
achieve sustained growth four decades after independence are beyond the
dependency theory explanation. In the subsequent sections this paper will
examine some factors that have led to Botswana success and I argue that the
absence of those factors explains why Malawi is underdeveloped.
4.0. Factors Behind the Development of Botswana
and Underdevelopment of Malawi
Some
of the factors that explains Botswana successes and Malawi’s failures to
achieve good levels of development are nature and quality of institutions,
prudent leadership and a consistent coordinated policy direction.
Institutions
can be defined institutions as systems of established and prevalent social
rules that structure social interactions (Hodgson in Seidler 2011:16). Economic
development and economic stagnation can all be attributed the quality of
existing institutions. Botswana has been
successful in achieving sustain growth because of it maintenance of good and
efficient institutions. The
institutional quality indicator takes into aggregate six Governance factors:
Voice and accountability, political stability, governance effectiveness,
regulatory quality and control of corruption. These factors are measured on an
Index ranging between -2.50 (less efficient institutional quality) and +2.50
(best quality). Malawi in this ranking has an index of -.34 and Botswana has an
index of 0.72 (Seidler 2011:44). This demonstrates that Malawi has inefficient
institutions ranging from accountability to control of corruption while its
counterpart fares better. To illustrate and support this point I will take the
case study of corruption.
Despite
the institution of Anti-Corruption Bureau and a Comprehensive Corrupt Practices
act corruption still remains a major obstacle to Malawi’s development. The the National Integrity Systems TI Country Report (2004) observes that
increasing corruption cases are due to weak institutions. Weak institutions in
Malawi is due weak parliament which fails to questions some practices,
inefficient accounting systems e.g. the Integrated Management Information
Systems (IFMIS) which was compromised
and used siphon large amounts of money. The tendency of ruling to fund
their political parties from state coffers is also a major cause of corruption.
Since independence 1994 parties have used government finances and resources to
fund activities instead of channelling the money to development activities that
will stimulate further growth. The recent cash-gate scandal has just revealed
the extent of corruption in Malawi where nation’s finances have been looted in
big sums for personal and political interests at the expense of millions of
Malawians living below the poverty line and declining economy.
In the Corruption perceptions Index of 2013 Malawi is ranked 97 out 177
and a score of only 37 out 100 indicating high levels of public corruption (CPI
2013). Relatively Botswana is on
position 30 out of 177 countries with a score of 64 out of 100 indicating
minimal public sector corruption. In the World Word Governance indicators
Control of corruption Index Malawi has a low percentile rank of 40 out 100 and
Botswana has a percentile rank of 79 out 100. Percentile
rank among all countries ranges from 0 -lowest and most corrupt to 100 -highest
rank and less corrupt (World Bank 2012). Both statistics above indicates that
development in Malawi is heavily pulled down by corrupt practices in the public
service.
Institutions which can assist to curb Corruption are inefficient due to
political interference. The Anti-corruption bureau, National Audit Office
handling of the cash-gate has been questionable and up to date nothing tangible
has been done on matter in which millions of money have been looted by public
officers. The judiciary as an institutional of social justice just also been
infested with corruption such that cases of Corruption are dying a natural
death without justice being served- the case of Muluzi. With all these corrupt
practices a country cannot develop. Corruption accelerates economic stagnation and
social development by diverting resources for public socio-economic development
activities into the coffers of the few.
High levels of corruption Malawi’s public service relative to its
counterpart Botswana to a larger extent demonstrates that in aggregate
governance institutions are more inefficient. The six indicators given in the
beginning are closely interrelated. It
is hardly possible that a country shows excellent institutional quality in Rule
of Law but fails in the other indicators, e.g. Control of Corruption (Seidler
2011:44). Therefore, high levels of corruption clearly indicates poor
governance and inefficiencies in the remaining five indicators. Therefore
Malawi’s under development and Botswana development has do to with the quality
of institutions specifically on the control of corruption.
Leadership
is another factor behind Botswana’s success and the stagnation of Malawi in
economic and social development. The post-independence African leaders
established authoritative states with exception of Botswana, Namibia and
Mauritius. Botswana has managed to sustain a democratic system of government
since independence. Political tolerance immediately after independence promoted
the spirit of debate and peoples participation in matters of development.
Botswana therefore collectively engaged in national building and not political
witch hunting as was the case with Malawi under Kamuzu Banda exemplified in the
cabinet crisis in 1964. Authoritarian regime led to the loss of human capital
which migrated to other countries. George Ayyitey points out that democracy
benefited Botswana in that there was an extensive inflow of talented political
refugees from abroad contributed valuable advice to Botswana officials and businessmen
(Beaulier, 235). Therefore, even though Malawi made progress soon after
independent, she did not achieve as much as Botswana did.
Predator
leadership plunged Malawi after the demise of dictatorial rule. The emergence
of multi-party in1994 was opportunity to use sound leadership based on
participation to stimulate development. Exceptional leadership counts as a
factor behind the economic progress of Botswana. However, since multi party Malawi has faced a
leadership crisis. Predator leaders and political elites took the lead and
siphoned a lot of public money in their personal accounts and abroad- the case
of Muluzi and Mutharika. Though efforts to curb corruption have been made,
leaders are in the fore front practicing corruption. The money which the
country receives as donor aid has being ending up in the hands of the few and
this has increased the number of people living below the poverty line and has increased
income inequalities with a GINI coefficient 0.6
and overall retarded economic and social development. The blaim for
underdevelopment in Malawi is to be taken by our leaders. Ayiitey
emphasizes that “what exists in many African
countries is a “vampire" or “pirate” state -- a government hijacked by a
phalanx of gangsters, thugs and crooks who use the instruments of the state to
enrich themselves, their cronies and tribesmen” (Ayittey 2002:5). This has been
the case with Malawi. Since 1994 things have changed for the political elites
and little or nothing for a common man. Thus, with twenty four years of
predatory non-visionary leadership we should not expect to achieve development.
Inter-related
with leadership is prudent policies. Botswana has achieved a sustain
development due to good development policies that both promotes private and
public sector growth. Its leaders have consistently followed development
policies and regime change has not affected the direction of national
development. On macro-economic policy the government of Botswana since
independence maintained a flexible taxation policy leading to private sector
growth and attraction of investors in its economy (Beaulier, 235). This, in turn has enabled it Gross National
Income to grow over years. In 2012 the GNP was $14699 million relatively Malawi
had a GNP of $4928 (African Development Indicators 2012/13). A sound fiscal
policy has enabled controlled expenditure and improved national savings which
are necessary for economic growth from the Harrod Dommar perspective. On the contrary, Malawi’s expansionary fiscal
policy has resulted into higher taxes thereby squeezing consumers and
investors, obstructing private sector growth and resulting to perennial budget
deficits demanding budgetary aid support. It is important to note that Botswana
unlike Malawi has grown with minimal aid from the World Bank and IMF. This has
prevented it from falling into the debt trap in which most African countries
are into. Botswana relations with the World Bank and the IMF have been of
advisory nature because the leaders recognized the dangers of heavy reliance on
the IMF and World Bank (Beaulier, 235). While Malawi curse IMF for its economic
problems Botswana already found ways of circumventing the effects of the
international capitalist system through sound fiscal policies.
The
power of prudent leadership coupled with sound macro-economic policies has
potential to change the development landscape of Malawi. This is evident in the
first term (2004-2009) of Bingu’s leadership. In 2006 the GDP growth rate was
about 7.6%. Inflation was reduced from
17.1% in 2006 to 8.7 % in 2007, a record
breaking since two decades according to the Africa Development Bank (AfDB/Africa
Economic Outlook 2008:401). On social indicator improvement, in March 2006, 46%
of families were declared food insecure, while in 2007 in same month the figure
drastically dropped to 6 %. (Ibid 402). The Malawi Growth and
Development Strategies (MDGS I&II) are among policies which were undertaken
with visionary leadership to spur economic growth and social change
In
Malawi, the lack of institutions that would reduce risk, and near absence of
public policies to facilitate the large infrastructural investments has been a
distracting factor for long term investments by both locals and foreigners (
Booth et-al 2006:x). Continuity of policy and projects after regime change
remains a challenge and implementation of
good policies has been a major problem. The Vision 2020 adopted in the
1990’s, Malawi Growth Development Strategies (MDGS I&II) are example of
policies that if consistently implemented by successive regimes would stimulate
development. MDGS vision of economic structural transformation is important for
Malawi to shift its attention from primary sector and invest in secondary and
tertiary sectors of the economy as this will lead diversification and reduce
overdependence on agriculture. Project continuity following regime change is
necessary. The Nsanje port which could have helped to cut costs for exports and
imports has received no attention under the Joyce Banda administration and has
just become a white elephant project, yet millions of money was spent. The
current administration wants to score immediate political points by investing
in low returns staff like the cow and shoes distribution than championing real
social economic transformation which will help transform the living standards
of the majority rural people who forms 90% of the nation’s population.
5.0 Conclusion
Following
this discussion, it demonstrate that dependency theoretical framework is not
sufficient to explain the development of Botswana and the under-development of
Malawi and the rest of the sub-Sahara Africa Asia and Latin America. Countries
which began on equal footing with a minimal difference in their GDP emerged to
be totally different economies after four decades. Change of institution
operations is necessary to promote rule of law and control corruption.
Corruption has destroyed development prospects of Malawi and this has been
acerbated by predatory leadership style which leads to poor macro-economic
policies. The key to Malawi’s development is quality exceptional leadership
that will rise beyond personal and political interest and transform policies
into action. Malawi and the rest of the developing world needs leadership like
that of Botswana to escape poverty. Policy choice and good governance, not
historical determinism are factors behind the social economic development of
Botswana’s. Policy consistency, long-term vision; strong leadership, able to
discipline, co-ordinate harmonize the interests donors and different arms of
government in line with a sound vision is all what Malawi needs to develop.
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