HomeAnalysisAdversity and shaking off the natural resource curse

Adversity and shaking off the natural resource curse

ZIMBABWE is supremely endowed with an abundance of nature’s gifts yet penury persists.

The Brett Chulu Column

Arable land and verdant pasture are found in enviable richness. Rich lodes of an assortment of minerals bestriding the famous geological complex going by the moniker the Great Dyke have been copiously bequeathed us by nature. Outside the Great Dyke, nature has liberally given us coal and gas. A climate generous to farmers and tourists has been there for our benefit.

Massive forests teeming with wild beasts of a great variety that tickle the tourists’ fancy are almost taken for granted — the majestic elephant, the graceful giraffe, the timid gazelle, the tomfoolery of the monkey — nature’s boundless generosity.

Nature has been at work in the geological past, chiselling unique landforms above and below the surface — a tourist’s bliss. Think the raw spectacle that is the Victoria Falls, an explosive collision of hydrology and geology. What about the massive rocks perched eerily one above the other, looking down equally impressive plains in sweet and spectacular columnar defiance? If anything, nature has been over-generous to Zimbabwe.

How can poverty take a firm hold in a land of such plenty? The answer lies largely in understanding the paradox of national prosperity: with a few exceptions, nations with either a scarcity of natural resources or that have had to overcome daunting adversity or forbidding natural and artificial circumstances, are the world’s leading economies.

This is not some random occurrence — the national attitude that stubbornly refuses to make paucity of resources and adversity an existential crisis is a cause of national prosperity.

Switzerland faced a massive depletion of labour at the end of World War II. The Swiss economic architects overcame this adversity by choosing to build their economy around quality of labour and focus on high-spending aspirational market segments. Switzerland is a world leader in pharmaceuticals, banking services and luxury goods.

Japan is well-known for facing a serious scarcity of land which manifests dramatically as constrained spaces for living. Think through the implications of space shortage — high unit costs of rentals, inadequate space to park cars, prohibitive costs of building warehouses, lack of space for huge home gadgets. Shortage of land has spurred the Japanese to churn out technologies that economise on space, catapulting Japan to the status of world leader in the production of lightweight and miniaturised technologies — think just-in-time manufacturing, compact and sub-compact cars and small printers.

Enter the Netherlands. The name Netherlands bespeaks the nation’s spirit to overcome adversity and scarcity.

Netherlands means lands under (water): they overcame the challenge of land shortage by reclaiming land from the sea.

A staggering 25% of the land in the Netherlands is below sea level. The Netherlands has stubbornly refused to succumb to the adversity of Europe’s cold climate. The result has been the development of intensive agriculture techniques and greenhouse technologies to maximise productivity on scarce arable land.

Environmental protection concerns from discerning consumers have been embraced by farmers in the Netherlands.

Special cameras can detect specific crops that need pesticides, cutting pesticide usage by 85%. Robots are helping on farms to improve efficiency. Conveyor belts located underneath stables automatically collect waste for further processing.

The Netherlands has consolidated its world-famous position as producer and exporter of top-quality horticultural and floricultural products. Its annual agricultural output is second only to the United States, a country 200 times its size.

Some of the adversity is man-made. Clever Swedish entrepreneurs, instead of complaining about government’s demand for exacting safety and environmental standards, decided to respond by pioneering innovative products. Sweden is now legendary for producing cars with the highest safety standards in the world. Swedish manufacturers pioneered quiet compressors and electricity generators as a result of strict noise pollution standards imposed by the Swedish government. Steel industrialists from the economically lagging northern Italy overcame high energy costs and shortage of iron ore by developing mini-mill steel furnaces that use scrap metal and consume less energy.

High-income per capita nations have refused to be limited by the scarcity of resources. The twin ills of scarcity and adversity have been strategically leveraged on to leap ahead of other nations. That is the major difference between us and them. We do not need to look further than our own history for empirical proof that a deliberate plan to overcome adversity can spur national wealth creation.

Though scholars of Rhodesian sanctions differ in their conclusion pertaining to the efficacy of Rhodesia’s sanctions-busting strategy, it is incontrovertible that it is during the 1965-1979 Unilateral Declaration of Independence (UDI) era that our manufacturing and agricultural base exploded and diversified to substitute for banned imports.

Kicked out of the sterling monetary area, tobacco exports to Britain completely banned, Australia ceasing exports of wheat to Rhodesia, a potential existential crisis was averted by ingenuity.

Commercial farmers diversified into soya bean, maize and wheat production. Available sources indicate that during UDI, only 30% of total consumption needed to be supplemented through imports — a remarkable achievement under adversity.

Here is my point: without the adversity wrought by sanctions, those who colonised Zimbabwe seemed to have had little impetus to fully exploit the economic potential underwritten by generous resources endowment. We are in a similar bind.

If Zimbabwe is truly under sanctions, then we are frittering away an opportunity to turn the sanctions-imposed adversity into productivity.

We have dismally failed to turn the adversity of drought into economic dividends. That is indicative of a pattern of national weakness where we fail to turn lemons into lemonade. It is an indictment on our nation that during this so-called period of Western-imposed sanctions, we have been looking up to Reserve Bank governors and politicians instead of looking to our engineers and entrepreneurs.

It is my considered opinion that abundance of natural resources contributes significantly to our poverty. We are under the curse of abundance. My thesis is that our motivation to think outside the box is limited due to lack of natural and artificial adversity.

The kernel of our thinking, judging from both the supporters and critics of current government economic policy, seems to suggest that something or someone is preventing us from fully exploiting our plenteous natural resources.

So we argue we need an abundance of capital just like our abundance of natural resources.

Some say look East for economic salvation. Others insist our salvation is in looking West. We seem not to be confident in looking to ourselves. The capital we hanker for is from nations that are less endowed in terms of natural resources. That capital represents the savings those nations have made. We want other nations’ savings.

Adversity has taught those nations to save to create pools of capital that we envy so much. It seems those with an abundance of natural resources save little because they assume they can spend with abandon since nature will keep giving and forgiving their recklessness. This is mental slavery which we need to be liberated from.

Chulu is a management consultant and classic grounded theory researcher. He has published research in an international peer reviewed academic journal.

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