[kictanet] Korea - Dr Ndemo for Presidency!

Wed Nov 16 11:35:15 EAT 2011

Alice,
It is more complicated than simply picking on the ideological choice.  Usually it is how the politics of any state interacts with the economy that an ideology is born.  If you recall, in communism, the state controlled the economy.  That is how we referred to that as planned economies, that is the politicians decided what to do with state productive resources.  Communism died 1989 and burried in Germany.

Capitalism however has been more dynamic.  Its originators thought that there must be a separation between the economy and politics like we do in Church and State.  Thus the development of the private sector.  In 1930 recession, Roosevelt slightly changed it by introducing welfare in cases where the resources do not trickle to the bottom.  He feared there would a revolt in favour of Communism since it promised equality.

In the 80's came Reagan and Thatcher who were basically anti-government and started to deregulate arguing that the businessmen know better.  This was a powerful movement and indeed most countries abandoned regulation even on the financial markets.  New financial instruments emerged.  Instead of asset backed securities we got leveraged securities (means that you take your mortgage and use it as security to get more money).  This came down crashing as evidenced by Lehman Brothers.  Obama stepped in and changed the history of Capitalism by rescuing the failing banks.

We are now in a vacum and the practices that created the problem permiated to our part of the world.  We need to maintain a strong regulatory regime otherwise we get into serious problems.  We are still going to experience problems since our currency is linked to the fragile Euro.  What you will never be told by Europeans is that by embrasing Laissers Faire economics the economic fundermentals were wrong.  The Greek people for example started to retire at 50 with good pension.  One in three Greeks is a civil servant and the few in Private sector have strong Unions.  Essentially they produced nothing to back up their good life and they borrowed to maintain it.

As we stand today things are getting worse in Europe.  Rating agencies have put France on Notice.  Italy if it falls, we shall all suffer.  China which has lots of Money keeps on manipulating their currency but if consumption of their goods fall especially in the US, they will suffer. 

Back to ideology.  The Chinese have a modified version of Communism/capitalism.  Some thinkers ask if such a model is good.  If you go by Maslaw's hierachy of needs, this model will not last.  You are going to see people demand for some rights.  In Sweden they have a social democracy where the state takes care of social services like education and health care.  In this model you are heavily taxed up to 50% of your income.

So if Africa were to find a quick solution to fast tracking development, we need to adopt one of the Newly Industrialized economies of Asia but we must give up some rights.  Singapore and Korea had benevolent dictators.  If you understand McGregor's theory of X and Y.  Africa falls in the X category for some time.  We are attempting to both economic and political reforms at the same time.  It has never happened anywhere except india and the reason why India will take longer to be like China or Korea. 

You now understand that both the state and private sector have failed capitalism.  Whatever that emerges Capitalism will never be the same again.  This why we need to chart our own way.  Be it social democracy or modified capitalism.  The politico-economic direction must be understood by those who vote because they provide the corrective mechanism.  That is why Kaletsky stated "politicians are corrupt, banks are greedy, businessmen are incompetent and voters are stupid".

We therefore need an ideology.  Imagine if God dropped $100 trillion in Kenya.  Shall we become developed?  The answer is NO.  Sometimes back while at the University we got a pay rise back dated to one year before.  I was Chairman of Department then.  The University was deserted.  Most of my colleagues went to drink and forgot to teach.  Most were suddenly generous and others became arrogant.  This lasted only as long as the resource lasted.  These were PhDs behaving this way.  What will happen with the ordinary citizen.  I still ask my self: Can we leapfrog in Development?

Ndemo.

Sent from my BlackBerry®

-----Original Message-----
From: Alice Munyua <alice at apc.org>
Sender: kictanet-bounces+bitange=jambo.co.ke at lists.kictanet.or.keDate: Mon, 14 Nov 2011 21:42:08 
To: <bitange at jambo.co.ke>
Cc: KICTAnet ICT Policy Discussions<kictanet at lists.kictanet.or.ke>
Subject: Re: [kictanet] Korea - Dr Ndemo for Presidency!

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