1. Good day People, today on #MoneyMasterClass we will look at HOW ECONOMIES RISE. Using the Brazilian, Chinese and Singaporean examples
2. In the spirit of the new political wave, i felt it necessary. Maybe at it’s end, our expectations will be recalibrated #MoneyMasterClass
3.I have seen all sorts of expectations being placed on the shoulders of GMB. Expectations of a messiah or even god #MoneyMasterClass
4. And quite realistically, if the man will not speak up to cool expectations, maybe he is indeed a messiah #MoneyMasterClass
5. But for the few who are realistic, we’d look at a few economies that went from 3rd to 1st world economies #MoneyMasterClass
6. 50 years ago, Singapore, undeveloped, had a GDP per capita of US$320. Today, it’s US $60,000, 6th highest in the world #MoneyMasterClass
7. That’s a 18,750% increase in 50 years. One of the most phenomenal of the new world. But how did this happen? #MoneyMasterClass
8. Many reasons, all tied to a Single-minded focus on their only advantage in the 1960s, deep waters(trading port role) #MoneyMasterClass
9.Thing is, most of the other regional Asian countries (and their airports) in the 1960-1970 were unsafe and undeveloped #MoneyMasterClass
10. Singapore seeing that it could be the regional hub, having deep waters needed an awesome visual image, upon touchdown. #MoneyMasterClass
11. Now, Lee Kuan Yew (an earlier Steve Jobs) had a keen eye for intellectual excellence and zero patience for mediocrity #MoneyMasterClass
12. Lee, a fresh lawyer out of Cambridge, had this amazing Dutch adviser to lean on for experience. #MoneyMasterClass
13. The Dutch adviser opened many doors in Europe, who needed to access the Asian market, from an Asian base #MoneyMasterClass
14. Now, Lee shut the borders to consumable imports, but positioned his nation as the Regional supply source #MoneyMasterClass
15. There was criticism for Singapore on the lack of true democracy (multi-party system) and lack of freedom of speech #MoneyMasterClass
16. All true, but you must also take into account the civil unrest that the small country was in during the 1960s #MoneyMasterClass
17. Singapore was lucky to have a talented government, A larger country would probably have needed democracy #MoneyMasterClass
18. The world didn’t like it but, You don’t sack a successful CEO / management team when they are that good #MoneyMasterClass
19. Now, lets look at China, which under the leadership of Deng Xiaoping in 1978 began reform by changing from a command to a market economy #MoneyMasterClass
20. China focused on development of infrastructure, enticement of FDI, promotion of education and retention of talent #MoneyMasterClass
21. As of 2006, a total of 1trn yuan(N32.07trn) had been spent building infrastructure in western China #MoneyMasterClass
22. This spending was easy, as China was under the communist party who conducted both authoritarian & progressive policies #MoneyMasterClass
23. The communist party led, unquestioned. Take over the leadership and give us growth, it seemed the people said #MoneyMasterClass
24. China under Mao, reformed its land ownership. Very crucial for urbanization and building factories and infrastructure #MoneyMasterClass 24
25. However, Millions of people also died under Mao’s radical ideas though. #MoneyMasterClass
26. But, he made it easy to get land and move labour from agriculture to industries. Hence, cheap labour::Welcome the West #MoneyMasterClass
27. Prior to the 1978 reforms, nearly 4 in 5 Chinese worked in agric; by 1994, only 1 in 2 did. Rest moved to industries #MoneyMasterClass
28.Truth is, a factory worker is more productive than an agricultural worker. So the more factory workers, the better. #MoneyMasterClass
29.With more owning land, Credit was more accessible, resulting rapid growth of village enterprises, in time began exports #MoneyMasterClass
30.Now, in Brazil, the decade of the 1930s was a period of interrelated political and economic changes for Brazil #MoneyMasterClass
31.Started with the 1930 revolution, which abolished the Old Republic (1889–1930), a federation of semi-autonomous states #MoneyMasterClass
32.To a an extent, the revolution reflected a dissatisfaction with the political control exercised by the old oligarchies #MoneyMasterClass
33. The coffee economy suffered from a severe decline in world demand caused by the Great Depression Sound familiar? #MoneyMasterClass
34. As a result, the price of coffee(Which was Brazil’s main earner) fell sharply and remained at very low levels. #MoneyMasterClass
35. The government was forced to suspend part of the country’s debt payments and eventually to impose exchange controls. #MoneyMasterClass
36. Government leaders hoped that the crisis would pass soon and that another export boom would occur It didn’t #MoneyMasterClass
37. In trying to diversify, Brazil began to establish the first large government enterprise, an integrated steel mill #MoneyMasterClass
38. But, this transition had dragged millions into desperate poverty. And somehow, the government, had to act quick #MoneyMasterClass
39. Government invested in health, education & direct poverty reduction via the Bolsa Familia social assistance programme #MoneyMasterClass
40. The scheme proved to be hugely effective, providing financial support to over 50m Brazilians, during the transition #MoneyMasterClass
41. Its responsible for 28% poverty reduction from 2002 to 2012. And was also cost effective, amounting to just 0.5% of GDP #MoneyMasterClass
42. The star performer really had to be Brazil’s broader politics that have enabled profound development and growth #MoneyMasterClass
43. Side by side its tax regime (36% of GDP), Brazil was able to lead relatively stable macroeconomic and fiscal policies #MoneyMasterClass
44. So, when faced with devaluing the cruzeiro, being careful not to spike inflation, chose exchange controls instead #MoneyMasterClass
45. In 1951, Getúlio Vargas enforced a system of import licensing that gave priority to imports of essential goods & inputs #MoneyMasterClass
46. These were essentials like fuels and machinery, while at the same time discouraging imports of consumer goods #MoneyMasterClass
47. But, The system became nearly unmanageable, and in 1953 a more flexible, multiple-exchange-rate system was introduced. #MoneyMasterClass
48. Which became the foundation for all that Brazil has built today, from tourism to oil #MoneyMasterClass
49. Now, in relation to Nigeria, In all of this, I think there are a few things we can agree happened to these 3 nations #MoneyMasterClass
50.
- They all had to re-evaluate their political/governorship systems, as what existed, wasn’t working #MoneyMasterClass
51. In the case of Singapore, the nation couldn’t even afford a democracy, so it had to look at the best way forward #MoneyMasterClass
52.
- They all invested heavily in the building of infrastructure and human support structures #MoneyMasterClass 52
53. By 2006, China had spent a total of 1trn yuan(N32.07trn) on infrastructure alone, for just one of it’s regions #MoneyMasterClass
54. And the most important of all 3. The growth/transition took decades to achieve Not 4 years, Not 8, decades #MoneyMasterClass
55. If we are to be honest with ourselves, we are at that point today that these countries were in the 1950s #MoneyMasterClass
56. Notice also, that all 3 nations, used different growth strategies unique to its own situation. So, we must find ours #MoneyMasterClass
57. Unfortunately, system of government reform is almost impossible here, so we don’t have the authoritarian luxury Lee had #MoneyMasterClass
58. Thus, whom ever that will grow Nigeria, will do so under the boundaries of democracy, while pushing tough policies #MoneyMasterClass
59. Look at civil service reform for instance, being backed by law, the president needs the NASS to make certain changes #MoneyMasterClass
60. So, when Lee Kwan Yeu could just wave his hand, the Nigerian president must lobby the NASS to get anything done #MoneyMasterClass
61. So when people say things like “GMB will make $1 -N1” You know it can only be ignorance of how governments work #MoneyMasterClass
62. So, HOW DO ECONOMIES RISE? There really isn’t a 1-size-fits-all answer But, my purpose was to show you how hard it is #MoneyMasterClass
63. QUESTIONS? #MoneyMasterClass