Contrary to what some of us would like to believe, it is virtually
impossible to discuss the causes and effects of the current economic
situation in our beloved Gambia without touching on the political and
social attributes of what constitutes our current social matter. This
is particularly apt where majority of the stakeholders – ordinary
Gambians - may not be familiar with the differences between politics,
economics and tradition. Politics, at a national level, can be
invariably defined as organizing for human projects, struggle for
power, or about who gets what, when, and how. Organizing for human
projects gives politics a broader spectrum involving whatever humans
do, the notion of struggle for power narrows the definition to the
arena of authority in society, and the notion of who gets what, when,
and how links politics to economics - the production and distribution
of wealth - as close allies. The politics of any meaningful attempt to
economic re-alignment in Gambia will have to embrace all three of these
definitions. In this discourse, I wish to share with all my perspective
of some of the positive as well as challenging factors of our socio-
economic structure that can be considered in an attempt to mitigate
some of the effects of the damage that has already been done. Please
pardon me for being brief - if you may say - with my explications as I
have very little time to dwell in details here. Consider these.
When we talk about private investments and economic development in
Gambia, we should be aware that we are living in a time when there is
almost a single prevailing development paradigm. That paradigm is
basically that private investment is the absolute key to economic
development anywhere in the world, including Gambia. It is the private
sector that - most people will agree - will fuel growth, not the public
sector or government, in other words. Undoubtedly, the A(F)PRC
government has an important role to play and I hope they realize that
by now. We have been talking about part of government’s role on this
forum and Gambia-L in terms of the judicial and executive side of the
public sector and many other roles as well. But, many of you will agree
that what will fuel economic growth and turn the mayhem around in the
long-run, is private investment. Both domestic and foreign private
investment will expand productive capabilities, will expand national
income, will probably expand exports, and will expand employment.
Economic growth, if sustained, will reduce poverty. There is plenty of
evidence that this has been the case in many developed and developing
countries. Some development professionals have argued otherwise
sometimes but evidence shows that, over a sustained period of time,
economic growth does reduce poverty.
When we talk about private and public investment, obviously, the kind
of investment is important. It makes a difference in what happens to
the economy as measured against what our goals are. When we think about
investment producing jobs - it is partly through the production of new
jobs that you raise income in economies like ours - we think of
manufacturing and services, including tourism. Then there is another
type of investment, which we see a lot in our sub-region - investment
in real estate and other fixed assets. Finally, there is public
investment, which, in Gambia in particular, includes significant
amounts of foreign aid. It is obvious that foreign aid has an important
role to play, not in replacing private investment, but in helping to
create the preconditions that will encourage investors to put their
money at risk and make that risk profitable. Those preconditions
include: an adequate physical infrastructure; a pool of sufficiently
educated or skilled workers that are productive; technology produced by
the public sector, for example, through agricultural research for small
farmers-something the private sector does not get into very much
because the returns are relatively small; the advice and leveraging of
supportive public policies; and the strengthening of institutions,
including the judiciary. Foreign aid has a role to play, but it is not
the fuel. It is the means of creating the conditions that will help
stimulate growth. At this point, I would have loved to dwell in detail
on the investment scene prevailing in Gambia today, unfortunately, I am
not privy to concrete figures and facts to back any assertions I may
want to make in that area, so I will pass on that for now.
Why is the level of private investment low? Why are the economic
players losing confidence in the economic structure, the currency and
the custodians? In order to answer these questions, here are some
pointers worth pondering on.
The lack of tangible natural resources is one explanation. However,
many countries are not rich in natural resources but are able to make
do with the little they have to become economic paradises in their own
right. Indeed, it is arguable that geography and climate have a major
impact on development. Many African countries are saddled with an
unfortunate geography, many small, landlocked states - that has its
disadvantages, and a climate that is difficult to deal with and carries
a high disease burden. Geography is one problem we do not have to deal
with in Gambia. The argument of lack of natural resources, however,
does not explain Gambia's development difficulties because we have seen
other places with similar conditions that still have investment and
growth. Read about Mauritius if you have the chance to.
The lack of infrastructure is another explanation. Infrastructure is,
as we know, pretty poor in our Gambia of today. In all honesty, it is a
lot better than it used to be, twenty or thirty years ago, I might add.
For example, one can easily set up a conference call with somebody in
London or New York and it is guaranteed to work, lest GAMTEL let us
down. Maintenance of infrastructure is clearly a problem that needs to
be fixed. The adequacy of uninterruptible supply of electricity
continues to be a major challenge. I cannot emphasize enough how big of
an impact this has and continues to have. There are places in the
greater Banjul area where businesses feel comfortable with the
infrastructure. But, there are not many places where private investors
think, "Yes, I can do business. I can get in. I can get out-no
problems." It is tough.
The A(F)PRC government policies are also very important. For a long
time now, we have talked about some of these policies that are
important to create a supportive environment for investment. Some of
those policies are straight macroeconomic policies - fiscal and
monetary policies - and trade policies. If you have many barriers to
trade, it may make it difficult to encourage investment.
(to be continued)
BambaLaye
Abdoulie A. Jallow
==============================================
"Our lives begin to end the day we become silent about things that
matter."
-Martin Luther King Jr.
====================================================
"Throughout history, it has been the inaction of those who could have
acted, the indifference of those who should have known better, the
silence of the voice of justice when it mattered most, that has made it
possible for evil to triumph."
-Halle Selassie I
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