Investor Jim Rogers made a trip around the world on his
motor cycle in 1980.
On his trip through China then, he predicted that the most
populous nation would be a major economic power house. He based his prediction
on the massive investment the country was making in its roads, railways and
ports despite the visible poverty he saw around.
This was barely three years after Chinese leadership chose
to introduce some elements of the market economy to help them boost the
economy. By 1980 the country was investing 25 percent of its economic output
compared to the US’ 16 percent.
Fast forward to the present and the results are there for
all to see. Their massive investments in infrastructure and human resource is
such that economists are now predicting that China will overtake the US as the
largest economy this year and not in 2027 as previously thought.
One can imagine that even then when they set off on their
journey they were many competing needs for the money, but the Chinese committed
massive amounts to investment, put their heads down and ground it out.
The work is far from over since even now in terms of GDP per
capita they are still below $10,000 and are ranked 83rd in the
world. There are still questions about how they mitigate against environmental
degradation but it’s safe to say their momentum will carry them along nicely into
the future.
Last week’s budget reading showed that the government has
stayed the course in its determination to bridge our infrastructure gaps.
Between the works and energy ministry they account for three in every ten
shillings of the sh15 trillion budget.
Finance minister Maria Kiwanuka said the money would be used
to accelerate the construction of ongoing works on 1,700 km of road and embark
on 650km of new roads. Monies were also set aside for the railway line, power
dams and transmission lines.
Of course it is one thing to plan but another altogether to
execute these plans properly.
But all the infrastructure in the world will count for
nothing if you don’t have the quality of people to exploit these resources to
their and the nation’s benefit.
It was heartening to see that education and health followed
behind investments in physical infrastructure with these four categories taking
up half the entire budget.
A lot of work has got
to be done on raising the level of our education but until that is done I guess
we will play the numbers game. So if it takes 1000 students to enrol in P1 to
produce a top notch engineer, statistically we will have a better chance of
discovering top notch engineers if we push a million kids into school. Not
quite but something like that.
The same can be said for health when it comes to things like
national vaccination programs but not necessarily for jamming people into our
overstrained health facilities.
So the key is, that with all this money being thrown at our
most pressing deficiencies, if used properly we should see a qualitative
improvement in our lives five, 10- or 15-years down the road.
Which brings us around to the issue of corruption. In the
last financial year the finance ministry moved to reduce the number of
government accounts and devolved the payroll to the districts as part of
attempts to streamline government expenditure – a euphemism for plugging the
loopholes the thieves were exploiting.
As a result many ghosts workers have been exhumed (forgive
the pun) and frivolous expenditures whittled down.
It’s beginning to happen already but increasingly money is
being spent on what it’s supposed to be doing and a certain segment of the
population is gnashing their teeth as the easy money has stopped flowing.
They of course are not taking it lying down but are fighting
back with such nastiness and vehemence
that you have to wonder how long before our politicians lose their resolve and
restore things to business as usual.
On the whole the budget set the right tone – shifting our
expenditures away from consumption to investments.
The rehabilitation of our transport and communications
networks in the eighties and nineties underpinned the growth of the last 30
years. Building hundreds of kilometres of road, adding hundreds of megawatts to
the grid and increasing the efficiencies on our railway line will be at the
heart of the next surge in growth. That is if we can execute these programs
properly.
In the meantime the huge monies need to pull off these
investments means we might be in for a few more years of belt tightening
unpalatable as it sounds. But to get a better standard of living for us that is
the sacrifice we have to make.
But as they say everyone wants to go to heaven but now wants
to die.
