Suddenly, the world appears to be engaging in a massive retreat and somersault from the much-acclaimed globalisation and borderless entity and embracing enclosed ecosystem which autarky represents.
Hitherto, globalisation (with its putative benefits) has been put forward as the sine qua non for engaging in trade, investment and not the least, exchange of technology amongst nations of the world. Having the imprimatur of capitalist nations of the world at the time, those of the socialist bent such as China and Russia were not enthusiastic and saw it for what it is: a “capitalist model”.
Paradoxically, the world is today witnessing revisionism from the very epicentres that promoted globalisation as the best thing that ever occurred after the discovery of electricity. Populist regimes are springing up everywhere in Europe and those not yet witnessing them are daily being threatened of their emergence by opposition parties espousing populist ideologies and waiting in the wings to take over.
Suddenly (permit me to use that word again!), slogans such as “America First”, “Let’s make America work again”, “America shall be great again” now rent the air. To give teeth to those, the Trump Administration has formulated very restrictive immigration policies. Trade agreements with China and other bilateral agreements are daily being reviewed and, in some cases, repudiated. Multilateral agreements are not spared either. To the regime, agreements on such issues as climatic change are not worth more than the papers they were written on.
In Europe, Brexit is no longer a slogan; it’s an accomplished reality today. The popularity of opposition parties espousing populist ideologies based on the sentiment of nationalism are more than ever on the ascendancy. It may be a question of time before they step into the reins of power in Germany, France and Italy.
Ironically, those that were running secluded or quasi open economies are today stepping out and filling the apparent gaps being vacated by the custodians of capitalism in clear fulfilment of time-honoured injunction that “nature abhors vacuum”. Today, China is aggressively filling the voids to the discomfiture and consternation of America and some Western Economies. Russia is upping its ante in the apparent struggle for the second historic scramble for Africa and other developing economies.
If the present slogan, albeit not voiced out, is “to your tents all nations”, how are the emerging economies (for the purpose of this exercise representing both the developing/less developed and frontier economies) including Nigeria embracing the clarion call?
It is no longer news that virtually all emerging economies rely heavily on imported capital, foreign loans, aids and grants to run their economies and provide critical infrastructure. How possible will it be for them to fill in the deficits that may arise should they embark on looking inwards and jettison foreign inflows?
It is neither feasible nor expedient that the world will ever practice total or absolute autarky but a much-diluted globalisation. It is already happening and one does not need to gaze too far to behold it. The advent of COVID – 19 aka Corona Virus has clearly demonstrated that one’s nation comes first before any other consideration. Nationals of European Union, America and Canada trapped in foreign countries read less developed ones like Nigeria following the onslaught of the virus have been evacuated by their home countries, notwithstanding the fact that the pandemic is ravaging their countries more than it is actually inflicting havoc on these developing economies, especially on human lives scale.
The first task before the emerging economies in view of the unfolding scenarios is to wean themselves of the foreign siege mentality that no development can ever occur without foreign input. No doubt, foreign capital will always remain desideratum for them but it must at the same time be regarded as means to an end and not an end in itself.
Second, cooperation amongst the emerging economies should be given more impetus than is the case presently. Fortunately, some have formed economic blocs in their zones but the level of cooperation amongst them in actualizing the objectives of these blocs is at best just a notch above infancy. Mutual suspicion and fear of domination have militated and continues to militate against robust engagements amongst them.
Third and as an adjunct to the foregoing which revolves basically around inward looking, some of these emerging economies have sizeable numbers of their nationals abroad who are already contributing to the growth and development of their countries back home via repatriation of diaspora fund. This should be encouraged by providing solid enabling environments for the funds to blossom. Governments of emerging economies need deliberate policies to attract those still outside the net while retaining those already in. These “hot monies” are likely to stay instead of the present situation where foreign investors, especially those of the portfolio hue crash out at the least volatility in an economy. The Nigerian Stock Market, for example, has been victim of this severally.
Finally, whilst not endorsing corruption in any shade or form, governments of these emerging economies should start thinking of granting forbearance to some of their nationals that have acquired illicit wealth and have had them stashed abroad. As a pre-condition for granting them soft landing, these nationals must undertake to repatriate all, without exception, those funds and invest them in their countries. On their parts, the governments must improve on the parameters for ease of doing business as enunciated by the World Bank (thus putting into action rather than mouthing enabling environment all the time) and undertake not to harass them in future provided they conform to extant laws of their countries. Rather than always looking outside for foreign investors, these nationals can conveniently turn into foreign local investors; a situation that is a win-win for all.
Emeka Okolo
Dr. Okolo is a Chartered Stockbroker and Management Consultant based in Lagos.
