Louis Brown Ogbeifun

By Louis Brown Ogbeifun | October 12, 2008

The United States of America is so many things to so many people. It is said in Nigeria that when a big masquerade is on the dancing floor, one cannot see all his sides if one stood transfixed in a particular position.  The only way one can have the total picture is to change position with each change in his dancing rhythm. This analogy fits the present American State because while the economy rages at home, she is leading other allies in Afghanistan, Iraq and on peacekeeping missions across the globe. If one stood to analyze the American State from one fixed thought or view of a race track, then one will misunderstand what America stands for in the history of the world. She is a huge phenomenon that only the deep with third eyes and well honed analytical minds can understand.

America has been described as God’s own country, the land flowing with milk and honey, the largest democracy in the world, the primogenitor of free market economy, the policeman of the world, the voice of the voiceless, the largest capitalist market but yet the highest debtor nation on earth; and she is a home to so many immigrants that are seeking shelters from the harsh socio-economic and political persecutions of their countries. Paradoxically and in spite of her greatness and impeccable crime bursting acumen, ethical values and transparency, America is witnessing a huge economic meltdown. This has sent jitters round the economic spines of other nations.

I never thought this could happen at this age in America because of her grip on almost all global financial institutions like the IMF and the World Bank. Several questions are begging for answers. What happened to the lenses and periscopes of these institutions that have served as the Central Bank and the clearing houses of the World for so long? Were they so busy concentrating on the poor nations that they forgot that corruption, mismanagement and transparency issues transcend the poor/rich borders? What has suddenly happened to America that predicted in 2005 that Nigeria will disintegrate in less than 15 years but yet so incompetent in forseeing the signs and symptoms of her economic meldown ahead of time? Who would have imagined that Lehman Brothers, AIG; WaMU and Merrill Lynch would come crashing like a pack of cards one after the other? America is at her worst economic crossroads since 1929. This is the naked truth.

In order to address the economic downturn without progressing towards a real recession, the government rallied round her financial institutions by proposing a $700 billion package to save them from further degeneration and total collapse. The economic brouhaha has globalized its destructive capacity and tendency to bring down the high and mighty and it is now running a borderless course. Not even the homeland of Thatcher, the mother of modern day privatization and liberalization policies has been spared. The Prime Minister, Gordon Brown proposed a bailout out package that involves hundreds of billion pounds and in some areas suggesting outright nationalization. These were people that believe that privatization holds the ace to economic Eldorado. More than 95% of the crashing financial institutions are private concerns. What an irony? Are we now returning to government owned institutions’ model? Or is it a case of modified public-partnership initiative?  The big lesson here is that no matter the institution, be it private or public, once the individuals in that organization are not playing according to the rules, honest, transparent, objective and have uttmost respect for the shareholders, the bubble will surely burst.

In the past, we hear government bureaucrats tell us that government has no business in business. The “tion” concepts as in privatization, liberalization, deregulation and lately globalization took the centre stage of governments’ reasoning and actions. The Nigerian Government from 1999-2007 followed the IMF prescribed pills by aggressively pushing us through self destructive liberalization and privatization policies, which to date have seen the actors and directors in frightening scams. The reasons for the privatization, deregulation and liberalization policies were hinged on government being a bad manager of resources. But we were quick to say that these policies were crafted without giving considerations to some peculiar drawbacks in the third world. We have often opined that while privatization, deregulation and liberalization in theory may mean the same thing globally, the outcomes are different in various parts of the world because of differences in orientation, values, attitudes, culture, beliefs and the social safety nets available to cushion the effects on the people.  

We have also argued that the government has a duty to ensure that markets run according to prescribed rules. Government cannot allow the market to run wild like a rabid dog and don’t expect the people to be in danger of facing the deadly outcome of such exposure. We cannot allow market forces to solely determine the operations of the market in the absolute and expect not to have an absolutely corrupt and degenerative market system, which will ultimately make the people slaves of the same markets they created. This is akin to the right to live and the freedom of expression, which are guarranteed by all natural laws, justice and constitutions. Even at that, such rights are not absolute. The American Government simplistically and sheepishly followed the “no intervention in the market system mantra” to get the US into this financial crises, which has caused slipped discs in the spinal columns of other economies.  

Apart from the mismanagement of the financial sector by all the stakeholders, one other major causative factor for the economic crisis is the multiplicity of wars involving the United States in some parts of the world. It is estimated that the US is likely to be spending about $5 billion every month on the wars in Iraq and Afghanistan. This does not include the money budgeted for reconstruction efforts in Iraq, which cannot be below a double digit billion. One can better imagine how many people facing death because of ravaging hunger and diseases accross the globe this funds would have saved.

Engaging in the wars in Irag and Afghanistan tend to have worsen the economic woes of America. I strongly oppose all acts of terrorism, solving problems through the use violence and shall continue to oppose it. I believe that dialogue holds the ace for any peaceful co-existence of the human race. Therefore, terrorism should have no place in any human society. Terrorism must not be allowed to thrive no matter the reasons for embarking on it. However, embarking on a large scale war like that of Iraq must be seriously weighed, objectively considered and the balance tilted in favour of a short term end before taking the final plunge. The reason(s) for embarking on such a large scale war must be beyond reasonable doubts because precious human lives are lost in the process. In addition, the post war health syndrome is even more agonizing for the future generations. So, caution is the word.

Up till now, one is at a loss on the real reason(s) for waging the war in Iraq. The non discovery of weapons of mass destruction (WMD) in Iraq as canvassed by the Bush administration before the strikes on Iraq makes the whole exercise as worrisome as the outcome of the war itself. In the process, Saddam Hussein, labelled as the godfather of terrorists was pursued, caught and killed.

One would have thought that as soon as Saddam died, Iraq would witness perfect peace and cessation of all terrorist acts in the Middle East. This was not to be. This theory failed to obey all rules of objective reasoning. Many more deadly Saddams in droves have been created by the war and Osama Biladen who plotted the strikes on the Twin Towers is still alive. He has kept the world guessing on his tactics, systems, network, abode and the act of terrorism itself. This is a paradox and very serious contradiction to good reasoning and intervention.

Irrespective of the minuses, one good thing the American President did in the case of the economic meltdown was to be bold and humble enough to accept the fact that there was an impending catastrophe. He had to appeal to his Congress men and women to assist him in bailing America out of the market failure. Following this appeal, the financial bailout as proposed by President George Bush and passed by the legislature showed that the legislators generally put America’s interest first. Before the bailout bill was passed, there was a bi-partisanship commitment to taking American financial sector out of the woods. As a way of healing the wounds and buying the confidence of the people, the government is to have direct investments in banks, guaranteeing their debts and insuring all deposits (CNNmoney.com) but in Nigeria, the government in the last eight years watched helplessly as manufacturing firms collapsed at a dizzying pace. It went ahead to sell every government owned enterprises at sight, folded its arms and became the undertaker overseeing the burial of the manufacturing and other service sectors. This collapse has churned out hundreds of thousands of youths and workers into the unemployment market without qualms. Many of those so retrenched are yet to have their end of service benefits paid.

It will be shallow thinking to believe that because we are very far from the economic meltdown in the US, Britain, Germany and other countries and therefore not likely to be victims. First, the largest buyer of Nigeria’s crude is the United States. If her economy becomes so battered and decides to tap more of her crude resources and import less from us; then our own economy would be seriously affected. If this lasts for a longer period, then there will be reduced direct foreign investments. Secondly, our foreign reserves are held in trust for us by banks outside Nigeria. Thirdly, we are a consumer nation that imports virtually every technologically based item. So, if the manufacturing companies overseas collapse, it means that we are likely to have fewer of those imported goods. One can better imagine the outcome, if cement, sugar, rice suddenly stop flowing into Nigeria. Lastly, the American companies doing business in Nigeria may decide to withdraw huge sums from their investement to support their home office and we all know what effect that will have on our economy.

Since we do not have ready alternatives for these goods in the interim, the citizens will buy the scarce commodities at costlier prices. Already, the Asian markets and other economies are tumbling. The reason is simple. Almost every nation depends on America for one form of export or another. America is the nerve centre of most economies and when there is a crack in the American market, there shall be holes in almost all other economies around the world. China’s exportation of machinery, electronics and audiovisual equipment alone to the United States (in billion U.S. dollars) from January to November 2001 was $16.428 billion (http://english.peopledaily.com.cn/200201/01/eng20020101_87880.shtml). Imports from Japan by the US were put at $145.5 billion in 2007 (http://www.state.gov/r/pa/ei/bgn/4142.htm). In Sub-Saharan Africa, Nigeria is the United States’ largest trading partner because of the high level of petroleum imports from Nigeria, which supply 11% of U.S. oil imports–nearly 46% of Nigeria’s daily oil production. Nigeria is the fifth-largest exporter of oil to the United States (http://www.state.gov/r/pa/ei/bgn/2836.htm). America imports about 70% of Platinum from South Africa. In 2007, the African Growth and Opportunity Act’s (AGOA) website showed that from January - June 2007, the US bought $4.4 billion worth of South African goods.

The above trade profiles between two economic powers in the Asian region and the two largest markets in Sub-Saharan Africa show that the United States has a grip on the first line commodities of all the continents. What the above means is that when the financial markets sneeze in America, the trading partners catch cold and shiver because any break in the export chain to America over a long period of time will affect their trade balance, the internal dynamics of markets and their budgets.  

The happenings in the financial sector in America today has led or may ultimately lead to:

• Erosion of the middle class
• Massive job losses and accentuated unemployment
• Decreased consumer spending
• Killing of the manufacturing sector
• Decreased capacity utilization
• Increased cost of available goods
• Hyperinflation
• Recession

One thing that is sure is that when the wave flattens, the American Government will fish out and prosecute the human elements whose judgements, actions or inactions led her to where she is today. When ENRON collapsed, those who were found to be connected to the reasons for the failure were quizzed, docked and jailed. This is what should happen as a way of restoring the peoples’ confidence in the financial sector. But when UNILEVER was caught in sharp practices in Nigeria, no punitive action was taken against the culprits. Many banks have collapsed in Nigeria and the wiz kids that ran the banks aground are walking the streets as queens, kings and in some cases are the movers and shakers of our society. Some of the Managing Directors that led the banks to their death knell are now occupying positions of authority where they decide the fate of other Nigerians while the depositors still brood over their losses. This reduces investors’ confidence and must not be allowed. 

Some of the reasons for the collapse of the financial institutions include:

• Criminal borrowing.
• Incompetent practices.
• Weak regulations.
• Lack of transparency.
• Corruption.
• Bad debts
• Unrestricted mortgage activities and lending to those with bad credit history.
• Decreased consumer spending as a result of massive job losses.
• Questionable greed, break neck expansion craze and stiff competition by corporate bodies.
• Lack of proactive strategy by the executive, legislature and the financial experts to deal with the symptoms at an earlier stage.

If we escaped the impact of these hiccups in America and still want to pursue our dream of becoming one of the top twenty economies in 2020, which by our current state of preparedness looks unlikely; our policy planners should do everything possible to:

• Develop the real sector.
• Develop the power sector to ensure the development of our technological base and the revamping of the manufacturing sector.
• Develop the steel sector beyond lip service.
• Strengthen and pump in more money into research and development activities.
• Build more less complex refineries to enhance the capacity of Nigeria to becoming a net exporter of white products.
• Commence the next phase of banking recapitalization.
• Diversify our economic base with much emphasis on agro allied activities.
• Viciously tackle the issue of corruption and fish out those involved in failure of any financial institution for sanctions.
• Proactively put strategies in place towards forestalling market failures at the symptomatic stage before the signs of imminent collapse become obvious.
• Tighter regulations and controls.

POLITICS

In the political sphere, the current campaigns and sanity that produced McCain and Obama is a beauty to behold. The primaries though rigorous were transparent. At the end of the primaries, the parties adopted those endorsed by the people. This is at variance with the political norm in the Nigerian politics of 2007 where most of those who won the primaries were substituted by their parties. Some of these cases are still in court. Political leaders in emerging democracies should take time to reflect on the fall out of the Bush bailout law and the American political journey so far. Some of the lessons to be learned are:

1. Loyalty: Soon after the primaries of their parties, all those who lost out joined the trail to ensure victories for their candidates. None of those who lost out in the primaries resigned to join the other party or to start a new party as we do here.
2. The people are the system owners in a political system: The over eighteen months’ primaries ceded the powers to choose the front runners to the people and not the selection syndrome at the whim of party leaders as witnessed in emerging democracies.
3. Freedom of expression: When Governor Rotimi Amaechi of Rivers’ State and Senator Ararume of Imo state went to court to seek redress over their being short changed by the action of their parties and got judgement in their favour, their party labelled them rebels and went ahead to expel them. In the case of Ararume, the People democratic Party (PDP) even urged its supporters to vote for the opposing party. This should not be so. Let us learn to respect the judgement of the courts. Our internal democracy should be reengineered to be tolerant of people’s views.
4. Think the Country first: When it was time to think America during the great drops in the financial sector, the congress came together to brainstorm and spoke in unison. Obama and MaCain signed a joint statement supporting the move of the President and had to break their campaigns to participate in the debates. They had to put their party divide aside to face the challenges of the moment.
5. Respect for the wish of the people: The Politicians were cautious in their quest to see President Bush’s bill through. They ensured that the citizens of America were not short changed in the process. The Congress men and women took into cognisance the feelings and opinions of their constituents. Why? The politicians knew that doing otherwise would mean not returning in the mid-term elections. This is the kernel of the matter. Our electoral system should be such that allows the people to determine the cause of governance.  Our political parties should allow the dynamics of people guided democracy to prevail.
6. Tolerance and right to one’s opinion: The Republicans that voted massively against the bailout proposal when it was first presented were not called derogatory names. Those that voted against it were not labelled saboteurs by the Republican Party because they voted according to their convictions and what their constituents wanted. They also did not vote for the bill because a Republican President presented it. They wanted strict checks, balances and the protection of the tax payers’ money and rights.
7. The Legislature is the conscience of the masses and so shall it be, no matter the political divide. If the Legislature truly performs its oversight functions as it should be, society might have been saved from the excesses of the capitalists and unpleasant consequences of uncaring executive officials.
8. Society must rise at every point in time to challenge executive lawlessnesss, enslaving capitalist systems, lack of transparency in management of financial concerns and corruptive tendencies. Failure to do this will perpetually put us at the mercy of poverty, hunger and disease.

For the entire world, especially the white race, time has come to respect the black man. Obama has shown that the black man does not have a black brain and that he/she can be very intelligent, forthright, transparent, honest, decent, trustworthy and objective. In the two debates so far, Obama has shown more intellectual ingenuity, respect and knowledge of how to make America a friend to all than McCain.

The concern of every American should be how to put food on the table of the American people and not the colour of who becomes the next president. People need food to have the stamina to lead others; people need food to enrich the brain and thinking faculties in order to teach others; People need food to pay attention to the teacher in order to become productive citizens and people need food to have the strength to fight a war. The Democrats have shown that to prevent the revolution of the belly, which could lead to mass revolt and revolution, the country needs a people friendly economy and a strong character to take the tough decisions that will make food available and affordable to the citizenry. This centres on a reinvention of America’s vibrant economy and Obama has proven that he understands the mechanics of how to turn the American economy around to put food on the table of every American.

To the Americans, this is the time to tell each other that they deserve the best candidate in the White House irrespective of race, sex, creed, colour or religion. They should tell the world that the White House was not built to symbolize the white race.  The founding fathers who designed the white house could not have inferred that it would be occupied by whites only. White stands for transparency, truth, character, peace and openness. These are great attributes, which must be displayed as Americans vote come November 2008. Americans should carefully weigh the options that will bail their economy out of the doldrums. If this oncoming election is mismanaged, it is goodbye to America’s leadership in the market of the greats.

In this political campaign, some Republicans have openly endorsed Obama and vise versa. In my beloved country, such people would have been expelled or suspended while the unlucky ones would have kissed the dust, courtesy of political hit squads. The American politicians have displayed rare acts of tolerance, respect for the rule of law and maturity, believing that there is another tomorrow where equal chance awaits the best candidates for political/executive offices. This should be applauded by the entire world.

To us in Nigeria, let us begin to appreciate that the little acts of patience, tolerance, transparency, nationalism and patriotism add up to make a country great. Let our strategic planners use the lessons from the failure of the American economic system to build for us a future economy that will ensure that every Nigeria can afford three square meals a day, have access to education, health care, shelter and any political/executive positions irrespective of their backgrounds.

Our politicians should emulate the rare display of understanding that the people matter in the decision making process in things that affect their lives. This is necessary to return our country to the path of true democracy. It is in the above that we can truly be said to be an emerging society that has respect for the rule of law and natural justice.

 

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