Coronavirus

Eye on power with PRINCE EMEKA OBASI

Suddenly global attention is focused on China on account of the now pandemic Coronavirus, codenamed Covid-19, which is causing dramatic and drastic changes in public behaviours and social relations. Many countries in different parts of the world are on total lockdown: schools are being closed in France, Spain and Italy; soccer games have been suspended and Euro 2020 shifted to next year; airlines are suspending operations; world meetings and conferences such as the World Bank/IMF spring meeting will be virtual.

The global economy is tumbling with oil price at its lowest level in six years; previous optimistic global economic outlook and predictions have come crashing like a pack of cards. Less than three months into 2020, the former optimism has turned to gloom and pessimism. It is quite interesting and indeed intriguing how human feeling and situations can suddenly change. The lesson is this: Man cannot play God; all the predictions and projections are all exercise in futility and amounting to very little.

The current attention China is getting is thoroughly deserved despite the threatening danger to life as a result of it. China is the world leader of the future and it is taking a virulent disease to announce it. Never in modern history has it taken events in one country to shut down the entire global system. China is giving us an indication of how the world has become dependent on it. Indeed, the world is paying the price for its selfishness, greed and crass opportunism in its dealings with China.

China presents the world with its worst dilemma: It is its largest market and source of growth and prosperity; as well as its greatest headaches and threat. The rise of China from the ashes of the Cultural Revolution of Chairman Mao Zedong’s era into a quasi-open economy should be the 8 Wonder of the world. The Cultural Revolution took China back to the Middle Ages, where the simplest basic things of life were either absent or in short supply; it was an obsolete ideology that was exemplary in its chaotic implementation. The outcome was an economic disaster.

Then, President Deng Xiaoping, a former party secretary who was denounced for revisionism and banished assumed the realm of power in 1981 after the ill-fated Gang of Four periods. A visionary leader, who understood the capitalist system more than his contemporaries, he introduced the “Two Systems” economic philosophy, which allowed the coexistence of communism and capitalism. The system allowed some level of private interest in the economy alongside government control.

It began with the Free Trade zones, FTZ, in Shanghai, and gradually spread to other economic centres and regions. Till date and unknown to many China conducted the largest privatization programme in history with the off-loading of thousands of moribund public enterprises and corporations to private ownership, something that would have been a taboo in a decade ago. And with the opening up of the economy, its growth rate soared. Again China is the only country in modern history that had grown consistently at 10 per cent for over 25 years.

Essentially, this unprecedented growth was fueled by western businesses which flocked to the country as bees to honey to take advantage of its huge market – more than the entire western markets – and cheap labour and available raw materials. Faced with an exploding population challenge, China was ruthless with its people to enforce a strict work ethic to raise productivity. Western businesses lured by such exploitative practices, such that could not be mentioned in their countries poured into China to make illegitimate gains sometimes using forced prisoners’ labour.

After about 40 years, the world does not know what hit it: China can single-handedly crumble the entire global economic and financial system. China is the largest exporter in the world; China is the largest importer of crude oil in the world, even though it is still a major producer; China has the highest sovereign foreign investment in the world: It has over a trillion dollars in U.S. bonds and Treasury bills and can easily sink the American economy and by extension global economy at will.

China is the largest sovereign credit in the world with most developing economies, including Nigeria, in debt peonage to it. In military technology and armaments, China has no one to fear anymore. China has the highest number of billionaires in the world more than the west put together. The list goes on.

Conversely, China is everything the west does not want and would like to end; yet they are now forced and compelled to accept China with all its challenges and threats to the free world. China is a totalitarian system, where the rights and freedoms so cherished in the west count largely for nothing.  After the 1989 Tianamenan Square student crackdown, China has made no bones about its disdain for liberal democracy.

China is a rogue nation that had built its industrial and technological base on the stolen intellectual property of the west without any remorse. China constantly manipulates its currency exchange rates to suit its trade and payment balances; this is the source of its major trade differences with the U.S. China is an ugly economic and political alternative to the west, yet the failings of the west make China is a beautiful bride. Even to the west, China has become a necessary evil to live with and even promote.

For countries such as Nigeria, China is a needed lesson to learn how leadership can decide to change their economic history and destiny.  Sadly, after so many years of suffering the vagaries of oil price volatility and trumpeting diversification Nigeria is still where it was in 1975 when it experienced the first threat of oil glut and price crash.

Nigerian leaders since then had advocated and campaigned for diversification, yet here we are facing another situation of oil dependency crisis. The big lesson for us is that unless and until we address our dysfunctional politics we may never succeed economically because politics determines the economy. Our politics is parasitic and prebendal and does not allow for ideological differentiation and identity, which makes it lacking in purpose, vision and commitment.

China is a product of generational politics and leadership. Unlike what obtains here where one leadership does everything to obliterate whatever its predecessor did, out of envy, anger and corruption, it is hardly expected we can replicate the China phenomenon. But we have to escape the existential threat of a default. The China economic miracle was born out of such existential challenges of exploding, population growth, mass poverty, infrastructure deficit, massive unemployment and political corruption.

In addressing these hydra-headed challenges, China created a world of its own and future for its people. For us, there is no way out; it is either we swim with the sharks or sink and be eaten up. For too long we have talked the talk, but what is lacking is working the work.