Rebounding countries | Daily FT

By making it among the easiest places for truly talented people who wish to contribute and who reinvest in part by living here and contributing to quality of life for all, this would stimulate both needed monetary flows, but also help the country become a magnet that draws potential and enterprise and investment here

It has been “the worst of times” for some time now. Raconteurs of world affairs have been far from sanguine, even in the run up to the COVID-ian meltdown of sanity and sense.

Here is Foreign Affairs Quarterly Editor-in-Chief Jonathan Tepperman, writing circa 2016, pointing to the “slow motion disintegration of Westphalian nation-states in multiple parts of the world” and a “growing weakness at the heart of the liberal, rules-based global order”.

Well, the subsequent unravelling of civil liberties, the fact-free and now factually debased predictions about “vaccine” efficacy and “freedom being a booster away”, the free fall of economies, the Ukrainian zero sum debacle, extreme polarisation, the degradation of discourse and more — only highlight the glaring need for, and the blatant absence of, competent leadership and capable governance.

Yet, there are dramatically potent remedies that don’t require a battalion of inspired leaders. Tepperman himself provided a captivating line-up.

Focus money on behaviours that matter

We can look at Bolsa Familia (Family Grant), the Brazilian anti-poverty program that gives cash payments to the poorest families in the country on the condition the children be vaccinated (real vaccines that sterilise and have demonstrated efficacy over decades) and in school, and that mothers and children get regular check-ups.

These simple behaviours stabilise health and provide the crucial scaffolding of education. Bolsa’s initiative is credited in playing a big factor in the decline of the country’s extreme poverty rate, from 9%, to a decade later, less than 3%. 

School enrolments climbed dramatically over this period, while infant mortality plummeted by 40%, with deaths attributed to malnutrition following by more than half. Moreover, globally as education goes up, family size declines to more manageable proportions. So, there is a net positive multiplier.

The cost of these “donations?” The cost was one-half of 1% of GDP. So, the cackling one hears about being a “developing” and “resource starved” country are absurd diversionary static, when we use Pareto leverage, and focus money towards reinforcing behaviours that actually solve real problems rather than just placating symptoms.

And despite then-President Lula da Silva having wide scale corruption charges levied against him, this shows how vastly imperfect humans can still manage to serve, even in the midst of political tap dancing, and advance the interests of their country.

Immigration as deliverance

Despite the rampant fear mongering championed by PM Trudeau in the COVID era, Canada’s approach to immigration was fairly inspired. In addition to already having a high percentage of foreign-born citizens, the Canadians, with magnanimity, welcomed tens of thousands of Syrian refugees into the country, saying, “You’re safe at home now”.

A small, closed, ethnically homogeneous State became a globally recognised influencer, an open and successful multicultural nation, by promoting pluralism. A massive budget is allocated to fostering national identity and community. A sense of belonging isn’t a stamp on a passport, it needs to be forged.

Sadly, the fear mongering re-COVID and the sheer intolerance of dissent over that period, demonstrates how vigilant we must remain to renew our virtues and those “habits of the heart” that deliver national character.

Singapore by contrast to the UAE, allows those who live and work there, in time to become “permanent residents” outside having money to invest, but rather by investing their lives and the commitment of their families. There is then a roadmap to eventual citizenship and so there is diversity and ongoing renewal.

Sri Lanka may not directly be looking to welcome refugees, but certainly it would benefit by making this a congenial place for digital nomads, roving talent, imaginative start-ups, as well as established companies and wealthy individuals. By making it among the easiest places for truly talented people who wish to contribute and who reinvest in part by living here and contributing to quality of life for all, this would stimulate both needed monetary flows, but also help the country become a magnet that draws potential and enterprise and investment here.

Why fight over crumbs when you can bake a bigger pie?

Stability and security

Guard-rails are needed in society. The protection of transparent laws and a trustworthy judiciary. Policing that is balanced, fair, effective, and where necessary, compassionate. Reliability, consistency, predictability all matter.

Indonesia over that decade and certainly since saw a significant decline in terrorist attacks while preserving democracy and fostering development. “Strong man” Suharto was eventually supplanted but maintained over two decades of longevity by zealously building the middle class and the productive capacity of the nation.

But post Suharto, a more permeable membrane was sought. Radicals were shown to be politically incoherent and self-destructive relative to national interests. No one ceded the moral high ground to them. And then, increasingly, they were treated as a “law enforcement challenge” rather than a military one. This kept civil society intact and frankly, sacrosanct. Thereafter by increasing the size of the political tent, they co-opted everyone who rationally could be inducted, rather than needing to “crush” dissent.

They became meticulous about only detaining suspects on sound evidence, ensuring trials for imprisonment were in public, and putting real energy into rehabilitation and not just incarceration.

Indonesia was also open to COVID early treatment given its hospitality to multiple input, flattened its curve, and is wide open for travel and investment.

Radical reconciliation

One of the poorest countries in the world, Rwanda, battered and shattered by a prolonged genocide and civil war that displaced more than 40% of the population, obliterated its civil service, and left the country with a per capita yearly income of only $ 217.

Then-President Paul Kagame went about rebuilding the country and cleansed national discourse of all mention of the differing ethnic groups (Hutu, Tutsi, Twa). They migrated to a “transitional” justice system based on a precolonial model, drawing on elected local tribunals to offer a suitable medley of confession, reconciliation and punishment for those who clearly perpetrated acts of violence.

Almost two million cases passed through these tribunals before they were dismantled in 2012. The resulting flood of peace, stability and the wherewithal for economic reform, enabled per capita income to treble in a decade. Child mortality went down by two thirds in a decade – a world record pace.

Rwandans are still poor, but palpably progressing. Gallup polls show 93% are optimistic about the future. There are pockets of despair and struggles aplenty, but the living hell of those eking out survival in a Congo, Syria or Afghanistan is quite different, both in terms of magnitude of challenges and the seeming intractability and permanence of the problems.

How much of what has been spilling over in Sri Lanka, very justly, was the smouldering outrage of a populace who have been looted, had their present and future pillaged so persistently? People here have had cynical politicians enrich themselves and their cronies by misallocating development funds, shutting the country on and off like a bathroom faucet over mad COVID reactions, far more extreme than most of the world with primarily, insolvency to show for it.

Morocco’s ascribed COVID deaths are about the same as Sri Lanka’s (around 16,000, though how many “with” COVID and how many “from” remain unknown, in terms of the impact of age and comorbidities), and Morocco still managed six million tourists in 2021, and has had over five million year to date ahead of their prime season.

Sri Lanka sees leaders who cannot apply fertiliser policy coherently, or monetary policy, or fiscal policy, or to govern in a way that builds trust and credibility, or who can even keep the lights on or supply  fuel to run an economy.

As some of this tide has slowly been turning, the fever of outrage and discontent has cooled somewhat, and hopefully will refocus away from tearing down to building back up… towards larger, structural aims.

There are other levers of economic success. Botswana has seen among the fastest growth rates in over 35 years of its independence without hyperinflation, recession or famine, by successfully leveraging its diamond resources under effective democratic rule.

Sri Lanka may not have diamonds, but it has other assets, from its advantageous geographic shipping location to regional trading partnerships, to industries like tea, to a highly educated workforce that with a less bloated bureaucratic structure could help it become a service centre for the region, to a bonanza of tourist treasures that need to be communicated, enhanced, tapped and lovingly and astutely presented.

South Korea devotedly focused on manufacturing excellence, then moved into service excellence, and still lagged far behind Japan due to development barriers that were as much cultural as economic. Leaders, who were far from liberal or ecumenically democratic, nevertheless allowed for representation, and a sharing of the wealth, and used an unstinted drive for efficiency and competition to drive creative destruction.

And Mexico, rarely touted as an economic dynamo, undertook under new vitalised leadership, that today has been able to stand its ground facing down the public health mafioso tactics of certain “world health” organisations to continue to preside over one of the most ambitious processes of economic reform commentators note “since the fall of the Berlin Wall”.

Ripples make the waves. You set an intent. You establish metrics. You link rewards to those metrics. You get the flywheel turning. You course correct and recalibrate based on evidence. Winning is beginning. All development has followed this route.

Current history is doing a wonderful job of illustrating that Government leaders can achieve great things if they act as servant leaders, if they are truly accountable for results for the people they serve, if they are engaged and not estranged from their constituents, and if they give up the “magical thinking” that camouflages real problems by falling further and further into a debt trap

More than meets the eye

Lee Kuan Yew kept corruption at bay and insisted Government Ministries be meritocratic and clearly credentialed. Their output was assessed on “TQM” grounds and performance management conducted as it would be at a leading company with rewards allocated accordingly.

Talented people shown they can prosper through the legitimate application of their talents are not inclined towards corruption. Mediocrities trapped on a treadmill that leads nowhere but increasing frustration, look for ways to garnish their pot, infuriate others as a way to personally feel powerful, and seek to fill personal rather than national coffers. Creating dead-end structures and then extolling honesty and probity is self-defeatingly absurd.

And you enrol the populace. One of the ways New York City was, back before the horror of today’s “police defunding” entailed broke “woke” madness, one of safest urban centres in the world, was by recruiting neighbourhoods. Neighbourhoods worked with police, they patrolled together, they provided mutual support and mentoring, they supported their schools and kids, all to improve the fabric of their own lives.

After 9/11, the anti-terror policing again worked with neighbours and neighbourhoods, fully supported by the overwhelming majority of Muslim Americans as horrified by extremist tactics as anyone, not wishing to be perpetually scapegoated or excoriated by bias. And it was this that led interfaith to flourish.

And we’ve seen some of this same phenomenon of late in Sri Lanka, and certainly in the unity sparked by the protests from the leaders of the various religious communities.

And you have to be able to manage nuance. You pay abundantly for talented people in Government but wholeheartedly eschew wasteful spending and silly perks and overstaffing and other non-value adding frills.

Nonetheless, the evidence suggests that if leadership is vital to progress, it must be far more common than our fears imply. Bolsa Familia, for instance, is not a unique example of a large-scale conditional cash transfer program, nor even the first. Mexico’s Progresa program, later rebranded Oportunidades, began in 1997. Like Bolsa Familia, it provided cash to poor families on the condition that they send their kids to school and keep their health checks up to date, and it too has reduced poverty and measurably stimulated health and learning.

Today there are conditional cash transfers running in countries from Bangladesh to Jamaica and Indonesia and beyond. The growth of such programs may help to explain why average inequality in countries of the developing world has been fairly flat since 2000, and Brazil is not the only country where it has rapidly declined. 

Mali and Peru both saw almost as fast reductions in inequality alongside more robust growth suggesting that they did even better at galvanising the wellbeing as well as the incomes of their poorest citizens.

To the extent that political regimes are primarily (excessively) judged on their ability to produce jobs through economic growth and low inflation, the pre-COVID era looked encouraging, though we now know there were infirmities aplenty.

The average inflation worldwide during the first 10 years of the new millennium was less than 8%, compared to 66% in the previous decade. But then we deployed monetary shenanigans to “bankroll” a global economic shutdown over a far from terrifyingly lethal pathogen (statistically clear from comparing 2020 to 2021 to 2022, irrespective of “vaccination” rates). And yes, we are reaping the whirlwind.

It isn’t just about income and inequality; while Rwanda is indeed a world leader in reducing child mortality, five high-mortality countries managed to reduce child deaths by three-quarters over the past couple of decades, and the world as a whole had more than halved the rate of such mortality since 1990.

This is why we have to look with heightened attention at what neglected and deferred medical care, vaccinations for curable illnesses foregone, the plunging of much of the world back into poverty will do, and how we might respond.

For all of the horrors of Syria then and Ukraine now, the world is getting less violent. Terrorism remains a tragic but extremely rare phenomenon outside of Iraq, Afghanistan, Nigeria, and Syria, and, even including those countries, global terror deaths are still far below annual automobile traffic deaths in the US alone by quite some way. 

In the United States, terror deaths run far behind those from fatal lawnmower accidents and deaths caused by falling out of bed. This was once the “defining” existential threat of our lives you’ll recall? And we wisely chose NOT to stop the world, or suspend our lives, or capitulate to fear.

And then Wuhan came knocking on our collective psyches, and without even awaiting any data, or doing any cost-benefit assessment, we jumped back into the crib. And no matter the data, no matter what Sweden demonstrated and then Florida, we developed an immunity to facts. If we can reverse this trend, and remember the distinction between learning “how” to think rather than being ordered “what to think” we can continue to pave progress.

Even better, some of the key developmental problems highlighted by think tanks may not even be problems at all. It isn’t really clear that there’s such a thing as a middle-income trap; there’s no evidence that countries “bunch” below a particular GDP per capita because it takes some fundamental and transformative institutional change to leap over it. 

In addition, countries with more natural resources tend to be richer than countries without resources. But also, countries that utilise and leverage their native resources are richer still — compare Japan to Saudi economically.

And the looming problem with energy as a reality and a resource is we are having theological debates rather than looking at the best, least invasive ways to power the planet based on what currently works and incentivising the development of the right technologies to give us a true suite of options, with different parts of the world availing of different solutions based on their locations, resources, population density and overall needs.

Abundant case studies, alongside evidence of widespread global development challenges do not show that entrenched problems, the type that Lanka seems rife with currently, can only be overcome with a rare miracle of leadership under unique circumstances. Success is not as hard as that.

Some combination of the comparative ease of replicating good ideas, a reasonable global stock of competent leadership who are measured and rewarded for creating value not for venal loyalty to a political tribe. And multiple paths to progress, requiring that ideas be converted into decisive action and tracked, means that improvement can again be ubiquitous rather than elusive worldwide overall, as it has been of late. For now, we are at a massive global inflection point. 

Current history is doing a wonderful job of illustrating that Government leaders can achieve great things if they act as servant leaders, if they are truly accountable for results for the people they serve, if they are engaged and not estranged from their constituents, and if they give up the “magical thinking” that camouflages real problems by falling further and further into a debt trap.

Crisis is the cutting edge of growth. First, we have to get good at facing facts. Next, we then have to liberate the will and the synergy needed to outgrow our resistance to change. We are then free to catalyse innovative ways forward and build the behaviours and reflexes to underwrite our breakthroughs. Then Sri Lanka can become a model of true recovery and transformation.

Instead of fighting over which Government leader currently occupies which seat, let’s demand the above from leaders at all levels. It is first and foremost, what matters most. 

– Pic by Lasantha Kumara