Issues
Local Challenges And Global Economic Trend
We live in an era of extra
ordinary challenges and changes. Individuals and organisations need to undergo extra ordinary metamorphosis in order to sustain their relevance in the new paradigm. Surely, complacency remains the biggest risk in our world of uncertainties and wrenching changes.
If you are asked: what’s the greatest challenge facing you as an individual, your organisation, your community or your country? Most persons cannot provide an answer in a sentence showing that they are not concerned with developments and changes around them. They are content living on a day to day basis.
What’s the consequence of failing to understand these macro issues? They simply submit to the directions of the media and their interests, and what’s the interest of the media? They market bad news, because in the media ‘bad news is good business.’
A cursory glanc’e around us shows that myriads of negative traits are struggling for attention. These are evident from news headlines: stock market collapse, Niger Delta. crisis, widespread terrorism, exploding inflation eroding your savings, the gyrating price of crude oil, monstrous
corruption, bank failures, falling standard of education, ozone depletion, business closures and the attendant layoffs, skyrocketing crime rate and on a general note what appears to be a system breakdown.
What happens when an individual feeds himself with these mega doses of negative information without the ability to dig deeper, analyse and sift these information? Chances are that person might start thinking negatively, might make decisions based on fear, and that could dampen the persons spirit, and sometimes the spirit of the entire nation might start sinking., just as is happening now.
We will quickly take a cursory look at some of the news that has been making waves in recent times:
*Global Economic Meltdown
*Outbreak of Swine Flu
*Global Economic Meltdown
*Banks Averted Crisis
*Proposed Deregulation of Petroleum Product Pricing
*Ongoing Strike in the Nations Tertiary Institutions
*Niger Delta Crises
The purpose of this address is not to frighten the listener with cold statistics of failures, but to prove that it is no longer business as usual, that the current economic downturn has a cause, and not a mere historical cycle. Again, you do not need to be terribly smart to understand the trend and reposition. I also believe that the current trend does not portend massive business failure or total collapse of the economy, rather demands conscious effort to make visible difference in our lives and the organisations we manage.
It is within our powers to make positive changes because we have a duty to ensure that the mistakes of the past is not repeated. To do this, an insight into the root of the problem is a necessity.
The global economic meltdown
The United States of America, the Great Britain. Germany, France, Japan, the Asian Tigers and Africa are all experiencing economic crisis of varying degrees. The current crisis tagged ‘Global Economic Meltdown’ is native to America, and like a gangrene speedily spread to the rest of the world.
Beyond doubt, America steers the world, and somehow we have all consciously consented to the belief that ‘when America sneezes, the rest of the world must have pneumonia.’ This understanding unfortunately is behind our submitting to what is fundamentally American.
The current global crisis has an identifiable cause. It is not just a mere historical cycle. It is a product of financial recklessness on the part of the business people in a hurry to make profits, the weak regulators on the side of government and the consumers with unbridled taste fuelling a culture of ‘buy now pay later.’
The average America is guilty of false lifestyle. Their homes, automobiles, electronics, furniture, cooking utensils, wardrobes, marriages, funerals, even their own education and that of their children are all on credit. It has even extended to tourism and leisure activities . You can posses virtually anything .if you can make a little deposit.
All these are going on blissfully, while the productivity of the American worker was at its lowest. The factories cannot compete due to outdated technology and they have been heading to Washington for bailout one after another. Their serv.ice sector is accused of poor quality service delivery and unresponsiveness, rather than improve, they have been perfecting their cost-cutting strategies. Again America has always had the lowest individual savings average in the developed world, currently at zero minus. The Fortune 500 Companies have been silently shedding millions of job on the guise of restructuring. When suddenly the pyramid got inverted, they tagged it ‘Global Economic Meltdown, , to make us believe that they are not alone.
Amidst all these downward spiral, the Bush administration was focused on fighting unnecessary wars in Iran, Afghanistan and other parts of the world on the guise of fighting terrorism. An estimated $16 trillion U.S dollars went down the drain with lots of life gone.
We must however not forget that America has gone beyond seeing themselves as the police man of the world. They see themselves as the world, thus, a Boxing or Wrestling context between two states in America is tagged World Championship. It is not therefore not surprising that when they pulled down their economy, it was tagged Global Economic Meltdown.
The good news now is that America is no longer talking about economic meltdown, they are talking about recovery, and they are really recovering fast courtesy of Presidents Obama’s recovery package.
But why are we affected? The twin factors of Globalization and Information Technology is behind this. First, Information travels today at the speed of light owed to the explosive developments and technical convergence in the sector. Second, globalisation has meant the free movement of capital, people, finance around the world. This, in effect creates a common tie. It was in the late 1990s that we got the first taste of financial globalisation downside:
Thailand’s 1997 financial crisis set off another in Korea the same year, and in early 1999, Brazil was forced to abandon its fixed exchange rate policy. These countries has little in common, yet the financial crises propagated from one to the next like a virus because of the links created by the new global economy.
The reason was simple: although the destinations of foreign direct investment were far flung and diverse, the source of the capital was not The Western bank that held Thai baht also held Brazil real. The fund that owned Korean bonds also held Russian bills. In the belief that the IMF, with the United States behind it, was willing to bail out economies that ran into short-term trouble, many of these institutions has loaded up on these assets. Once a crisis started, however, these institutions has to reassess the risk of their entire emerging market portfolios. Such a reassessment would precipitate a progressive sell-off, with assets in the weaker countries going first.
This accounts for why in the face of the meltdown of the US economy, they had to dump their investments in the Nigerian Stock Market. Further, the factory and business closures that greeted America meant less demand for Nigeria’s crude oil, thereby reducing our crude export amounting to less revenue for our country.
The global economic order
Its commonplace to say that we live in a period of unprecedented change. Today, sweeping economic change threatens older industries, traditional ways of living, and social and national cohesion by exposing economies and societies to new and powerful competitive forces.
Emerging nations and former communist countries, once only loosely connected to the global commercial and financial system, feel the shock waves of periodic economic crisis resulting from the rapid exodus of foreign capital and sudden adverse shifts in international trade flows, which lead to large numbers of lost jobs and bankruptcies. Some individuals, groups, and regions initially benefit greatly from expanded opportunities like the ability to sell more abroad, work for foreign companies in their own countries and overseas, or obtain foreign capital [or their business. Others, however the least educated and least skilled, feel left behind, and disenfranchised.
The global trend today appears to have headed for a disorder which is opposed to first President Bush idea of a ‘new world order.’ That order was largely based on two assumptions: first, that a healthy economy and sound financial system make for political stability, and second, that countries in business together do not fight each other.
U.S. foreign policy number one priority was clear: to encourage the former communist countries of Europe and the developing nations in Latin America, Asia, and Africa to adopt business friendly policies. Private capital will then flow from the developed world into these countries, creating economic growth and jobs. The argument is that when free enterprise takes hold, traditional grievances, resentments, and hostilities would fade.
This policy was backed with lots of money, in the form of direct aid, loans and multilateral lending institutions such as the IMF, and a liquid market for governments to issue bonds to international private-sector investors. The message from the D.S to the developing nations was adopt economic reforms, and we will be there to bail you out if your economy gets into trouble.
This reform path, often called the ‘Washington Consensus, involved fiscal discipline, trade liberalisation, privatisation, deregulation, and expanded property rights through legal reforms. Promoters of these reforms hoped the changes would make developing countries more attractive to foreign investment and would integrate these countries even further into a competitive, but peaceful, global economic network. In its most extreme form, the vision became one in which these developing countries become part of a liberal, open world economy that promoted western values such a democracy.
Amidst protests from our elite class, Nigeria keyed in like most of the developing countries, hence the several reforms in terms of deregulation, privatisation, liberalisation etc. It seemed more dangerous to stay out of the trend than to plunge in. By August 2000 the member nations of the WTO has risen to 139.
No sooner did economic watchers and analysts discover that the package and promises sounded too good to be true and so it proved. The new world order of Bush which Clinton sustained were soon replaced by the ‘new world disorder’ of the second Bush.
From order to disorder
It was in 1990 that we got the first taste of financial globalisation downside: Thailand’s 1997 financial crisis sent off another in Korea the same year. The economic virus spread to Russia the following year, and in early 1999, Brazil was forced to abandon its fixed exchange rate policy. These countries had little in common, yet the financial crisis propagated from one to the next like a virus because of the links created by the new global economy.
The reason was simple. Although the destinations of foreign direct investment were far flung and diverse, the source of that capital was not. The Western bank that held Thailand also held Brazil. The fund that owned Korean bonds also held Russia. The belief is that the IMF supported by the US was willing to bail out economies that ran into short-term trouble.
At first, the IMF stepped in to help, but the costs of repeated multilateral bailouts became less and less affordable. Eventually the Russian government defaulted, rendering worthless the almost $40 billion in domestic government debt held by financial institutions and more than having the $100 billion value of Russian equities. The bailout to Russia by the IMF managed to provide just a month solvency, and people began to question the ability of developed world to supply economic support to the developing nations. The developed world on their part began turning off the tap.
The second President Bush put the final nail on the coffin of the new world order. Even before September 11, the administration was signalling that it has a very different vision of international engagement from its predecessor’s, one based on security, not economic concerns. And security was now defined not just in the narrow Cold War terms of safety from attack from a hostile, though stable, superpower, but very broadly to include safety from terrorism and weapons of mass destruction, as well as vital economic inputs such as oil.’
In May 2001, President Bush and Vice President Cheney’s national energy policy stated, ‘Energy security must be a priority of the U.S. trade and foreign policy. We must look beyond our borders and restore America’s credibility with overseas suppliers. In addition we must build strong relationships with energy-producing nations in our own hemisphere, improving the outlook for trade, investment, and reliable supplies.
The implication was clear: security in this case, energy security, was now the foremost consideration in US trade and foreign policy. The National Security Strategy of the United States of America published in September 2002 shows that the thinking developed from there. It then became clear that the Bush administration defines international engagement in terms of bilateral relationships with strategically important allies and unilateral confrontation with almost anyone else.
This understanding is behind the war in Iraq, the removal of Afghanistan’s Taliban, and urder of Saddam Hussein, hoping that this will murder to a stable Middle East which will in turn ensure a steady supply of oil especially if Iraq’s reconstruction goes well. This is also responsible for Russian government under Putin aligning with America for economic and diplomatic interests.
With this new stand of the United States, there is no more encouragement for developing countries to pursue reforms.
The nigerian experience
The major challenge before our political and business leaders is to identify where our competitive advantages lie and create an enabling environment for us· all to build on it. This is exactly what other developing countries have been doing.
What we have witnessed in Nigeria in the past few years is an addening misallocation of scarce economic resources to the financial sector. It all started with 9/11 which prodded the US Congress to enact the Patriot Art with its panoply of anti-money laundering structures. Suddenly, the Bin Laden dividend reached Nigeria’s shores. Thieves who stole from both the public and private sectors could not easily wire their stolen funds outside, meanwhile, the EFCC was watching over their shoulders. As a result, they have no place to easily hide their stolen loots except in the Nigerian Stock Exchange and Real Estate. That explains the meteoric quantum rise in stock and property values in Nigeria in recent times. Those who followed the case of the disgraced former boss under Obasanjo’s Administration may recall that he invested his stolen loot in the Nigerian Stock Market and Real Estate.
Meanwhile, oil revenue flooded Nigeria, and banks conducted several rounds of public offerings and raise huge sums, first to satisfy the new mandatory recapitalisation requirement by the Central Bank of Nigeria, and went again and again to raise huge sums for the balance sheets. And while all these were going on, weak stock market regulation added to the speculative frenzy as bankers who also doubled as investment bankers engaged in self dealing and hyped up stock market investing. The fix was on and our stock market was blasting in full throttle. Everyone was investing in the stock market.
Suddenly the stock market capitalisation that was in excess of 15 trillion naira fell to a little over four trillion, and because no condition is permanent, the market is gradually bouncing back, and our enthusiasm is gradually being rekindled, then the news of the averted bank crisis.
The bank crisis
The recent revelations by the Central Bank of Nigeria on the debt portfolio of 5 major commercial banks in Nigeria is a pointer to the irregularities in the system as it affects the private sector. The almost one trillion naira non-performing loans by these banks within a few years of recapitalisation and repeated rounds to the stock market for fresh IPOs has exposed their inefficiency in managing large sums. Their response has been attempts at raising fresh deposits through aggressive marketing, road shows and many innovative packages.
Thanks to the discerning leadership of President Yar Adua that quickly responded with a bail out of N420 billion. While the EFCC stepped in to assist with the recovery of the bad loans.
It is also worthy of note that Nigeria is not alone in the issue of failed banks. In the past one year, the United States has lost about 89 banks to bad loans, and some more are joining the cue.
The Niger Delta Crisis
The militancy in the Niger Delta, and the failure of successive administrations to manage the situation successfully has added them conspicuously in the list of the nations problems, especially with the effect on the revenue generation capacity of the country. Interestingly, the amnesty which is currently in force has made it possible for our crude oil quota to increase from 1,200 bpd to 1, 700bpd .
All stakeholders must make frantic and sincere effort to stem the tide and find lasting solution to the crisis.
The striking Nigerian Tertiary Institutions
Ideas have been described as the currency of the 21 st century economy. This is because business has moved from the hierarchical Ford Motor Corporation of the 1920s which employed a large number of people to perform repetitive tasks in precise rapid ways to achieve a consistent objectives. This was the operational style of all organisations in the industrial age. Sad to say, decades into the information age many organizations including our tertiary institutions still carry on with the operational styles of earlier glorious but no longer relevant generation.
The essence of authority of ideas can be best appreciated if we understand the role of learning institutions. If we take Harvard University for example. At Harvard, we consider it an extremely important accomplishment when a 25 year old student who has been there for just 18 months makes a discovery that disproves the pet theory of a 55 year old professor who has been there for 30 years. Indeed, the professor whose theory has been disproved might be the first to congratulate that graduate student.
The notion that of the community’s most junior members would be applauded for upending the life work of one of its most senior would seem exceedingly strange in many organisations and countries. Yet it is fundamental to what Harvard and other American universities are about. And if you look at the organisations in the economy where the greatest value is being added, they are increasingly the organisations that share the values and character of universities.
Organisations that foster an environment where creativity is rewarded, that prepare themselves to respond to challenges and execute their strategy in a nimble way, and that discourage rigid adherence to hierarchy will best be able to meet with the challenges.
To be contd
Godswill C. Onyekwere
This is an open letter to the Minister of the Federal Capital Territory, Chief Nyesom Wike.
Your Excellency,
Sir, ordinarily, I would not be writing an open letter to you, but like a wise man once said, “Silence would be Treason.” So I prefer to stay alive than face the consequences of silence in the face of crime. With each passing day, and as the socio-political tides continue to turn, it has become more pertinent that more people speak up in a concerted MANNER to prevent the death of our party, the Peoples Democratic Party (PDP), as we appear to be, in the words of W. B. Yeats, “turning and turning in the widening gyre” heading for an end where the falcon will no longer hear the falconer
It is unfortunate that since losing control of the Federal Government, with the loss of President Goodluck Jonathan at the poll in 2015, our party, the Peoples Democratic Party (PDP), has continued on a downward spiral. It is much more painful, that where it is expected that leaders within the party should rise to the challenge and put an end to this decline of our great party, some have instead taken up roles as its undertaker.
It will be hypocritical to claim aloofness to what I believe is your grouse with the PDP and I am not a hypocrite. It will be uncharitable on my part to discountenance the role you have played in strengthening the PDP from 2015 up until the last Presidential primaries of the party. It is my belief that your grouse against certain members of the party who you perceived worked against the party and abandoned it in 2015 and then came around much later to take control of the party, is justified. Also know that your decision to remain in the Party and stifle its progress on the other hand, as a sort of payback, stands condemned. For a man of your pedigree and stature, it is a dishonorable act, highly dishonorable and stands as testimony against all you claim to stand for.
At least, it can be argued that those who you hold this grudge against, abandoned the party completely and did not sit back while actively working to destroy it from within. But what then can be the argument on your own part, seeing that those you are currently working with against your party are the same people who set in motion, and executed surgically, the plans that not only ended our Party’s leadership at the centre, but ended up dislodging the first Niger Deltan to occupy Aso Rock as Commander in Chief of the Armed Forces. Is this not akin to “cutting off one’s nose to spite one’s face?” That will be worse than folly. Let us not throw away the baby with the bath water because we do not like the soap used in bathing the baby. It will be a grave mistake.
Honourable Minister, sir, it is rather unfortunate that of all people, you have also decided to play the role of an undertaker not only for our party, but for our dear Rivers State.
I will like to take you down memory lane a little. Let me remind you of your emergence as Guber candidate of the PDP in Rivers State, against all fairness and justice in 2014. You will remember that despite the reality being that you as an Ikwerre man was poised to replace a fellow Ikwerre man in Governor Chibuike Rotimi Amaechi in our multiethnic state, Rivers people overwhelmingly stood by you and pushed for your emergence as Executive Governor of Rivers State in 2015. I dare say that your popularity in the entire Niger Delta region was at an all-time high at this point.
I want you to understand why you were loved across board leading to your eventual emergence as Governor of Rivers State in 2015; it was because when it looked like all were against the second term ambitions of the first Niger Delta man to emerge as President of Nigeria, you became not just a pillar but a beacon of resistance by standing for Goodluck Jonathan. Rivers people, as grateful and rewarding as they can be, paid you back by ensuring your electoral victory against the incumbent All Progressives Congress (APC) led by your predecessor. On your emergence, where there were second term Governors in the region, you, a first term Governor, was seen by the people as not just the leader of the PDP, but the leader of the entire Niger Delta region. You earned it, and no one could dispute it.
In 2019, when your re-election bid was being challenged ferociously, Rivers people once again stood solidly behind you. Many were killed in the process of defending your votes. Do you remember Dr. Ferry Gberegbe that was shot and killed while trying to protect your votes in Khana Local Government Area? There are many more unnamed and unrecognised sons and daughters of Rivers State who sacrificed their lives so that you could emerge as a second term Governor of Rivers State.
In 2022/23, Honourable Minister, you oversaw a party primary across board that saw some candidates imprisoned and internal party democracy jettisoned for your wishes, leading to the emergence of flag bearers of our party all singlehandedly picked by you. You have on more than one occasion publicly stated that you paid for all their forms. Even those shortchanged in this process licked their wounds and continued to play their roles as party members to ensure the success of the party at all levels. In what will go down as one of the most keenly contested elections in recent Rivers history, with formidable candidates like Senator Magnus Abe of the Social Democratic Party (SDP), Mr Tonye Cole of the All Progressives Congress (APC), and the vibrant youth driven Labour Party (LP), PDP emerged victorious across board except for Phalga Constituency 1 that was lost to the Labour Party. (Not that you did not loose in some other LGA’s but let’s stick to the official figures declared by INEC).
It begs the question, why then do you want to burn down Rivers State, when everyone who now holds political office emerged through a process designed and endorsed by you? Is it that you do not care about Rivers people and you are all about yourself? If so, I am forced to believe that those around you are not telling you the truth. The truth being that in a state where your words were law; where houses and businesses could be demolished or closed down without any recourse to legalities, where Executive Orders could be deployed to stifle the opposition, that your popularity is now at an all-time low. Probably because they are afraid of you, or of losing the benefits they gain from you, they fail to tell you that what you might perceive as a battle against your successor, has slowly but gradually degenerating into a battle against Rivers State and Rivers people. You know, there is a popular saying that, a man can cook for the community and the community will finish the food, but when a community decides to cook for one man, the reverse is the case.
LEAVE FUBARA ALONE
You have gone on and on about being betrayed by Governor Siminalayi Fubara. You point fingers forgetting that some of those same fingers quick to spot betrayals point straight back at you. It is not Governor Fubara that has betrayed the PDP by working against it in the just concluded General Election, and working with the opposition at the State and Federal level to destabilise the party. It is you, Honourable Minister. It is not Governor Fubara that betrayed Rivers people by instigating a political crisis with propensity to escalate ethnic tensions in Rivers State. It is you Honourable Minister. It is not Governor Fubara that has declared himself God over all in Rivers State and has no qualms with burning the state to the ground to prove a point. It is you Honourable Minister. It is you Honourable Minister who told the world that the APC was a cancer and you can never support a cancerous party. It is you Honourable Minister who ended up facilitating the emergence of the same “cancerous” APC that has accelerated the economic decline of this country and further impoverished our people with no remorse. All so you can be a Minister of the Federal Capital Territory? The lack of self awareness is gobsmacking.
Some days back I came across a video where you talked about death and how you do not cry when you hear about the death of some people because you have no idea what might have caused it considering many a politician swear “over dead bodies” and still go back on their words. Those words made me think, and I could see the reason behind them. You see, in chosing to be God in the affairs of Rivers people, you have closed your eyes and ears to reason; you see nothing and hear nothing that can cause you to rethink on the path you have chosen. In your quest to “show Fubara” you have unwittingly united a vast majority of Rivers people behind him, so much that even those who despised him because of you, now like or love him, because of you too. In your scheming, I will advise you not to forget that “the voice of the people is the voice of God”.
Note that the war which you have or are waging against Governor Fubara, has gone beyond being merely political as you might see in your minds eye. It is now one that, fortunately for some and unfortunately for others, has evolved into a war against Rivers people. It is good to point out that no one has taken a stand against Rivers people and won. No one has gone against God and won. In your defiant characteristic manner, it will be unfortunate if you believe your own hubris and that of those around you on the possibility of you being the first to successfully go against Rivers people. It will be a needless gamble; one where if you win you create more enemies for yourself than you can withstand on your political journey, and if you lose, your legacy becomes an inglorious and irredeemable one in Rivers State, the Niger Delta, and Nigeria at large. For your sake as regards posterity, it is my greatest wish that you have a moment of sobriety and a deep reflection and introspection on this path you have chosen.
Honourable Minister, sir, what is left of your legacy is on the brink of being completely desecrated and relegated to the dustbin of our political history, and it will be a sad end to what I will say has been a wonderful political career that many can only dream of. The ball is in your court, and may God Almighty have mercy on us all and forgive us for our shortcomings.
Gabriel Baritulem Pidomson
Dr Pidomson is former Chief of Staff, Government House, Port Harcourt and former member, Rivers State House of Assembly.
In 2015, I made a conscious decision to invest my financial resources, my time, and energy into supporting Nyesom Wike’s gubernatorial campaign. I poured my heart and soul into ensuring Nyesom Wike emerged victorious even at the risk of my personal safety.
Again in 2019, I doubled down on my commitment. I invested a significant amount of money to procure campaign outfits for all twenty-three Local Governments Areas of Rivers State. I spared no expense in supplementing Wike’s election efforts in my own local government, and once again putting myself at great risk to safeguard the fairness and transparency of the electoral process.
However, despite my unwavering loyalty and sacrifices, I found myself abandoned and forgotten by Wike. Throughout his eight-year tenure, he failed to acknowledge my contributions or fulfill his promises and agreements. Even as a former Deputy Governor, Wike denied me my severance benefit.
My investment in Wike’s governorship was not just financial – it was a commitment of passion, dedication, and belief in a better future for Rivers State. Yet, his leadership style of dishonesty, greed, drunkenness and rash abuse of senior citizens brought me nothing but disappointment, misery and losses.
By the grace of God, today I speak not as a victim, but as a hero. I have accepted my losses, and I have moved on. And as I reflect on my experience, I cannot help but urge Wike to do the same and allow peace and development to reign in Rivers State.
Nyesom Wike, when you speak of investing in Governor Sim Fubara’s election, remember those like me who also invested in you. Remember the sacrifices I made, the risks I took, and the promises and agreements you left unfulfilled.
It is time for you, Wike, to let go of the past and allow Governor Sim Fubara the breathing space he needs to lead Rivers State forward. Allow him to focus on the challenges of good governance and the aspirations of the people. Spare him these unwarranted and ill-conceived political manoeuvrings founded on personal agenda and not for general good of Rivers State and her people.
I may have lost my investment on Wike, but I have not lost hope in the future of Rivers State. And together, we will continue to strive for a brighter tomorrow.
Long Live the Governor to Rivers State, Sir Siminialayi Fubara!
Long Live the Good People of Rivers State!!
Long Live the Federal Republic of Nigeria!!!
Engr Ikuru is former Deputy Governor of Rivers State.
Tele Ikuru
