₦airaland Forum

Kukutente23:
Don't mind the stealth agbadorian
Imagine excusing corruption in a country like Nigeria!!
Even the devaluation, na corruption dey the base

nairalanda1:
So we should borrow more money?

Thanks. You have done well, Lord Vader. And now I await your report on the Death star. We shall soon test it on the Nigerian economy in line with Darth tinubu and High Lord Biharis plans...hahahahah

Treadway:
me I don give up on nairalanda1 tey tey.

If fuel never hit 2k, he no go happy. All the other issues and nuances no matter to the nigga, na sha make fuel cost increase be the Koko. By then sha when the fuel hit 2k, and full tanker na 100million and maybe only 1 station per state na im dey dispense fuel as per say all fuel stations don fold up, we go see whether problem don dey solved or whether dem don create another fresh and worse one. Till then, me jus dey ignore im posts.🚶‍♂️🚶‍♂️🚶‍♂️

As I've always maintained, I don't even mind the removal of subsidy, but devaluing the naira at the same damn time, was just nothing less than a mad decision by a mad man/men.

Remove the subsidy, and defend the naira at least till one or more expected refineries come on stream. That is what a sensible human being that isn't CORNfused and has dung for brains would have done, given our circumstances. No be textbook theory apply in this case, na common sense apply.

To be net exporter of finished products isn't a day thing, infact in our case, it isn't even a decade thing.

nairalanda1:
Yes, the responses are to be expected

Kind of why I don't see any future for our economy

Let is continue to borrow to fund subsides

We need am.


Good night

P.s

All the commenters here have not answered the question of how we would find money for subsides worth 40 trillion per annum at least..na adhomienn and abuse and long treatiese they Dem write.


But none of them can answer the vital question


The apc supporters too have not told me how their lord and master tinubu would bring in more money for Nigeria .


Anyway, it was a fun exercise.



Pax vobiscum

Treadway:
The subsidies cost the so called 40 trillion cos they abandoned common sense and devalued the naira. First maalu Buhari and now this clown.

Obasanjo paid subsidy
Jonathan paid subsidy
Yaradua paid subsidy

Nigeria didn't collapse.

Jonathan left debt that the so called subsidy removers have multiplied x4.

Tinubu supposedly removed subsidy and in one year has increased the domestic debt by over 45trillion naira and the foreign debt by around $20b.. my explanation for that is simple. CORRUPTION, but OP no feel say corruption na front burner issue, na only subsidy removal be the Koko... paragraphs upon paragraph on one message and that message only.

We dey here dey watch😁

Kukutente23:
Which subsidy is 40trillion alagbado?
Dem take lie swear for you?
Let's even assume it is 40trn, that's less than $30bn. Tell your looting Mastere who have pilfered $582bn to release just a quarter of their loot and we'll be fine don't you think?

nairalanda1:
A lot of Nigerians spend time thinking...this is me mildly putting it...in magical thinking. Apparently if we fight corruption and so forth, we are all going to end up having enough money for subsides for everything.

Except that this is impossible. To earn enough for subsides for petrol and electricity alone...remember the government still subsidises health and education...to a point where both would be supplied in full , we need something around the region of 35 trillion naira at least every year.

Add the fact that our budget for this year barely touches 30 trillion naira.

But the subsidy people argue, and have always argued for the past 10-15 years that NIgerians are poor, and we need to spend more on subsidy. SO, the government goes ahead, spends on subsidy.....and takes more loans to pay for the subsidy.....leaving us with a debt that is stone cold high.

Or we have to make more money. Apparently we need to fight stealing. But let's be clear...our budget before stealing is 30 trillion naira. Now 30 trillion naira is not enough to pay for anything for 260 million people (cue denials that we are actually 40 million, not 260 million or something). But how to make more money? Our agric system is going to take ages to modernize, and the mining sector is in a mess . As for industries.....when Nigerians deny that our power sector needs 17 trillion naira, and so forth, what do you expect? We pay for poor power supply yet we expect good power supply. SO all that is left is to tax the over 70% of people who do not pay taxes, but....we are poor, we are poor.

At the end of this, we are left with a connundrum. All the methods we have suggested are wrong because we are poor...but the good things have to be provided...so for decades, NIgerian leaders have borrowed and borrowed. And right now we are seeing the effects of borrowing...forced to remove fuel subsides, forced slowly to remove power subsides, and now education subsidies are going.


Yet, Nigerians shout that anyone supporting this is a government man, or an IMF Man, or is this. Or supports evil, or supports tinubu.

It is even getting so riddiculous that supporting businesses making a profit means you are a tinubu supporter. Some funny reasoning



But it is understandbale. People are poor here. One can understand when people call you t-pain supporter for the nth time, where they come from. Nigerians have suffered for decades, and sane economics requires even more hardship. So, we demand for subsdies that in the long run cost more than our budget , we demand not to pay taxes because we are an oil rich nation, and then we complain when the government inevitably turns to take more loans.


Hell, all this does not mean that one is blind to corruption, it is very obvious from the facts that the government of tinubu is very corrupt. If the National Assembly padding, where a institution of research gets billions to fix a school in some obscure village , not in its catchment area does not convince you, what will? But let's be honest, the stealing is already taking place from a small pot. ANd it is wrong, and it must be stopped.


But then again, NIgerians don';t want more pain.


At the end, we never get sane economic policy. We use the bad economic policy to bash the government in power, and when our side takes over, we then defend...sane economics.


I have been on this site for over 10 years, and never have i met people who think that you can get a ferrari at the cost of a bicycle for kids....as Nigerians.

It's no use.


Well, one day, reality will hit us.

nairalanda1:
So we should borrow more money?

Thanks. You have done well, Lord Vader. And now I await your report on the Death star. We shall soon test it on the Nigerian economy in line with Darth tinubu and High Lord Biharis plans...hahahahah

Kukutente23:
No
We should recover our looted funds of $582bn

If a thief entered your house and stole your laptop, will you start looking for money to buy another one or Chase after the thief to recover your property?

This thing na common sense o

Na corn dey block your view

nairalanda1:
So the conclusion of this thread is simple.

Let us borrow 60 trillion naira every year and pay for subsides.

And from the apc guys, let's continue with the corruption.

Opposing both beliefs shows you are agbadorian.

Thanks guys


I have heard you.

nairalanda1:
😁😁😁😁😁😁😁😁😁😁😄😁😁

In other words, we should borrow more.

Thanks for being honest.

lamentor78:
You will never know the problem of Nigeria except you get to that seat. Most president thought they can solved it until they see that some evil forces are always in Aso villa

Kukutente23:
You mean recovering loot is borrowing?

I don't get you here

nairalanda1:
No,let us continue to borrow.

I understand.

It takes years to recover loot, plus when the loot runs out what next?

Oga, nothing for you again. Na to abuse me you know. Good afternoon. Come back when you are a more mature person.

nairalanda1:
There is no evil forces.

Tinubu got in there to earn money and run the country..actual economic policy he had not because if he used the actual medicine Nigeria needed,.he would be out of power in minutes.

Nigeria is a poor country..always has been..that is why any proper economic policy would lead to a lot of pain and suffering

Even the reforms tinubu has been making were forced on him by years of borrowing and corruption..and even then he tried to borrow our way out of it, until it got more worse than usual.

So here we are.

At independence we had two solutions.. capitalism or socialism paid for by selling raw materials and loans..we chose the latter.

And no, apc or tinubu ain't leading us out of this mess

Kukutente23:
Go back and read my first response to you

Stop defending corrupt politicians

Kukutente23:
Nigeria was a socialist country at independence?
I'm hearing this for the first time
The excuse of Nigeria being poor always comes up from the govt side when they're asked to live up to their promises
OBJ implemented some economic policies in his time that did not lead to pain
That time saw the emergence of a middle class that's been systematically wiped out under the guise of reforms
Only a dullard will think wiping out the middle class is a good economic policy

Kukutente23:
Nigeria was a socialist country at independence?
I'm hearing this for the first time
The excuse of Nigeria being poor always comes up from the govt side when they're asked to live up to their promises
OBJ implemented some economic policies in his time that did not lead to pain
That time saw the emergence of a middle class that's been systematically wiped out under the guise of reforms
Only a dullard will think wiping out the middle class is a good economic policy

Kukutente23:
Nigeria was a socialist country at independence?
I'm hearing this for the first time
The excuse of Nigeria being poor always comes up from the govt side when they're asked to live up to their promises
OBJ implemented some economic policies in his time that did not lead to pain
That time saw the emergence of a middle class that's been systematically wiped out under the guise of reforms
Only a dullard will think wiping out the middle class is a good economic policy

nairalanda1:
IN other words, we borrow more.

Yes, son, recover looted money, but it won't be recovered in time to pay for your subsides, so, borrow more.


Good afternoon.

1. The Dutch Disease

In a strict sense, the Dutch disease refers to the crowding out of the traditional export sector by a new booming export sector and the non-tradable goods sector. However, in a broad sense, a country is said to have developed the Dutch disease syndrome when an income "windfall" in the economy leads to harmful or adverse consequences including a decline in the traditional sources of income in the country. The income windfall may come from sharp increases in the price (or production) of exportable (tradable) natural resources (e.g. crude oil, cocoa, coffee, diamond, gold, etc) and/or sharp increases in foreign aid or direct foreign investment or loans, resulting in sharp increase in foreign exchange earnings. The Dutch disease syndrome has existed, albeit in a benign form, since nations started trading with each other. However, it derives its current name from the experiences of the Netherland in the 1960s following the discovery and exploitation of large deposits of natural gas in the country's adjoining North Sea. This led to a significant increase in the country's revenue (foreign exchange) and appreciation of the country's currency (i.e. the Dutch guilder became stronger) which in turn led to a reduction in the competitiveness of the non-oil tradable goods sector of the economy. What was otherwise a positive development in the oil sector led to problems in other sectors of the economy including a depression in the non-oil export sector. It was not until the mid 1970s that the Dutch disease took a malignant form in many oil-exporting and some other mono-cultural developing countries as well as in some aid-dependent countries.


Corden and Neary (1982) have demonstrated how Dutch disease occurs in an economy. According to them, in a country experiencing "boom" in the export of a commodity, the economy can be divided into three sectors: the "booming" export sector, the "lagging' traditional export sector and the non-export sector. [b]The Dutch disease occurs when the traditional export (tradable goods) sector is crowded out by the booming export sector and the non-tradable goods sector. The lagging traditional tradable goods sector may include cocoa, palm produce, cotton, rubber, coal, copper, textiles and some manufactured goods while the booming export sector may be crude oil, coffee, gold, etc. The non-tradable (non-export) goods sector covers all those goods that are produced for domestic consumption only, e.g. staple food items, clothing, building materials, locally-assembled cars. Where crude oil (and gas) is the booming export sector, the non-oil export sector may be crowded out by the oil sector and the non-tradable goods sector of the economy. This can happen when the oil revenue windfall increases domestic demand for non-tradable goods and pushes up domestic prices leading to an appreciation of the real exchange rate which in turn reduces the competitiveness of the non-oil export sector. This will in turn lead to a reduction in non-oil exports in both quantum and value terms. The oil windfall may also lead to movement of the factors of production in the economy. For instance, capital and labor (and land) may shift from the non-oil export sector to the oil sector (in order to maintain or increase reserves and production) and the non-tradable goods sector (to take advantage of the growing domestic demand). This explains why the increase in oil prices and the subsequent oil revenue windfall in many oil-exporting countries have tended to depress their non-oil export sector while at the same time generating a boom in both the oil and the non-tradable goods sectors. With capital and labor shifting from the non-oil export sector to the oil-sector and non-traded goods sector, firms in the non-oil export sector are forced to either close down or reduce their scale of operation. The boom in the oil and non-traded goods sector increases the demand for imported goods. This may not be a problem in the short-term so long as the country has enough foreign exchange to pay for the imports. The depression in the non-oil export sector and the boom in the other two sectors have medium to long term implications for the economy because the oil windfall will not be permanent given the volatility, unpredictability and exhaustibility of crude oil. For instance, if there is a decline in oil prices and oil revenue, the lagging and collapsing non-oil export sector will not be able to compensate for the drop in oil revenue while domestic demand for the non-traded goods and imports remain sticky. Consequently, the country will be forced to borrow from the international financial market to compensate for the decline in oil revenue. Over time, external debts will increase and so will the debt service obligations. Even when oil prices go up later and there is another round of oil windfall, it is difficult to correct the earlier damage or distortions created by the initial or previous oil windfall. In some cases, the oil exporting country may be forced to adopt some form of structural adjustment program (SAP) to correct such distortions or imbalances. Some of these SAPs are painful and may increase the prevalence, depth and severity of poverty[/b].

In an extreme case, the Dutch Disease can lead to "Immiserising Growth" syndrome - a situation where increase in the output of exported commodity by a country leads to a deterioration of the country's welfare (Bhagwati, 1958). This happens when the effect of export-led growth on a country's terms of trade is strong enough to more than offset the direct benefits of growth. It is an extreme case of self-defeating growth. Although the theory of Immiserising Growth was not originally developed for oil-exporting countries, its tenets apply to many oil-exporting countries in the sense that despite the substantial increase in their export revenue, they have suffered significant decline in general welfare due largely to mismanagement of their oil revenue. Thus, the Dutch Disease syndrome confirms the assertion by a Spanish writer in the 16th Century that "the gratification of wealth is not found in mere possession or in lavish expenditure but in its wise application". Although the main manifestation of the Dutch disease syndrome in an oil exporting country is the decline or depression in the non-oil export sector, other "collateral" manifestations include appreciation of the real exchange rate at the onset, increase in corruption, increase in external debt and increase in poverty. However, an oil-exporting country must not suffer from the Dutch Disease. Furthermore, not all oil-exporting countries suffering from the disease have all "collateral" manifestations at the same time. Country experiences vary considerably depending on their political economy

https://www.nairaland.com/7526493/managing-dutch-disease-nigeria-excerpt

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Kukutente23:
LET IT SINK THROUGH YOUR THICK AGBADO SKULL!!

They call the Third World the lazy man’s purview; the sluggishly slothful and languorous prefecture. In this realm people are sleepy, dreamy, torpid, lethargic, and therefore indigent—totally penniless, needy, destitute, poverty-stricken, disfavored, and impoverished. In this demesne, as they call it, there are hardly any discoveries, inventions, and innovations. Africa is the trailblazer. Some still call it “the dark continent” for the light that flickers under the tunnel is not that of hope, but an approaching train. And because countless keep waiting in the way of the train, millions die and many more remain decapitated by the day.

“It’s amazing how you all sit there and watch yourselves die,” the man next to me said. “Get up and do something about it.”

Brawny, fully bald-headed, with intense, steely eyes, he was as cold as they come. When I first discovered I was going to spend my New Year’s Eve next to him on a non-stop JetBlue flight from Los Angeles to Boston I was angst-ridden. I associate marble-shaven Caucasians with iconoclastic skin-heads, most of who are racist.

“My name is Walter,” he extended his hand as soon as I settled in my seat.

I told him mine with a precautious smile.

“Where are you from?” he asked.

“Zambia.”

“Zambia!” he exclaimed, “Kaunda’s country.”

“Yes,” I said, “Now Sata’s.”

“But of course,” he responded. “You just elected King Cobra as your president.”

My face lit up at the mention of Sata’s moniker. Walter smiled, and in those cold eyes I saw an amenable fellow, one of those American highbrows who shuttle between Africa and the U.S.

“I spent three years in Zambia in the 1980s,” he continued. “I wined and dined with Luke Mwananshiku, Willa Mungomba, Dr. Siteke Mwale, and many other highly intelligent Zambians.” He lowered his voice. “I was part of the IMF group that came to rip you guys off.” He smirked. “Your government put me in a million dollar mansion overlooking a shanty called Kalingalinga. From my patio I saw it all—the rich and the poor, the ailing, the dead, and the healthy.”

“Are you still with the IMF?” I asked.

“I have since moved to yet another group with similar intentions. In the next few months my colleagues and I will be in Lusaka to hypnotize the cobra. I work for the broker that has acquired a chunk of your debt. Your government owes not the World Bank, but us millions of dollars. We’ll be in Lusaka to offer your president a couple of millions and fly back with a check twenty times greater.”

“No, you won’t,” I said. “King Cobra is incorruptible. He is …”

He was laughing. “Says who? Give me an African president, just one, who has not fallen for the carrot and stick.”

Quett Masire’s name popped up.

“Oh, him, well, we never got to him because he turned down the IMF and the World Bank. It was perhaps the smartest thing for him to do.”

At midnight we were airborne. The captain wished us a happy 2012 and urged us to watch the fireworks across Los Angeles.

“Isn’t that beautiful,” Walter said looking down.

From my middle seat, I took a glance and nodded admirably.

“That’s white man’s country,” he said. “We came here on Mayflower and turned Indian land into a paradise and now the most powerful nation on earth. We discovered the bulb, and built this aircraft to fly us to pleasure resorts like Lake Zambia.”

I grinned. “There is no Lake Zambia.”

He curled his lips into a smug smile. “That’s what we call your country. You guys are as stagnant as the water in the lake. We come in with our large boats and fish your minerals and your wildlife and leave morsels—crumbs. That’s your staple food, crumbs. That corn-meal you eat, that’s crumbs, the small Tilapia fish you call Kapenta is crumbs. We the Bwanas (whites) take the cat fish. I am the Bwana and you are the Muntu. I get what I want and you get what you deserve, crumbs. That’s what lazy people get—Zambians, Africans, the entire Third World.”

The smile vanished from my face.

“I see you are getting pissed off,” Walter said and lowered his voice. “You are thinking this Bwana is a racist. That’s how most Zambians respond when I tell them the truth. They go ballistic. Okay. Let’s for a moment put our skin pigmentations, this black and white crap, aside. Tell me, my friend, what is the difference between you and me?”

“There’s no difference.”

“Absolutely none,” he exclaimed. “Scientists in the Human Genome Project have proved that. It took them thirteen years to determine the complete sequence of the three billion DNA subunits. After they

were all done it was clear that 99.9% nucleotide bases were exactly the same in you and me. We are the same people. All white, Asian, Latino, and black people on this aircraft are the same.”

I gladly nodded.

“And yet I feel superior,” he smiled fatalistically. “Every white person on this plane feels superior to a black person. The white guy who picks up garbage, the homeless white trash on drugs, feels superior to you no matter his status or education. I can pick up a nincompoop from the New York streets, clean him up, and take him to Lusaka and you all be crowding around him chanting muzungu, muzungu and yet he’s a riffraff. Tell me why my angry friend.”

For a moment I was wordless.

“Please don’t blame it on slavery like the African Americans do, or colonialism, or some psychological impact or some kind of stigmatization. And don’t give me the brainwash poppycock. Give me a better answer.”

I was thinking.

He continued. “Excuse what I am about to say. Please do not take offense.”

I felt a slap of blood rush to my head and prepared for the worst.

“You my friend flying with me and all your kind are lazy,” he said. “When you rest your head on the pillow you don’t dream big. You and other so-called African intellectuals are damn lazy, each one of you. It is you, and not those poor starving people, who is the reason Africa is in such a deplorable state.”

“That’s not a nice thing to say,” I protested.

He was implacable. “Oh yes it is and I will say it again, you are lazy. Poor and uneducated Africans are the most hardworking people on earth. I saw them in the Lusaka markets and on the street selling merchandise. I saw them in villages toiling away. I saw women on Kafue Road crushing stones for sell and I wept. I said to myself where are the Zambian intellectuals? Are the Zambian engineers so imperceptive they cannot invent a simple stone crusher, or a simple water filter to purify well water for those poor villagers? Are you telling me that after thirty-seven years of independence your university school of engineering has not produced a scientist or an engineer who can make simple small machines for mass use? What is the school there for?”

I held my breath.

“Do you know where I found your intellectuals? They were in bars quaffing. They were at the Lusaka Golf Club, Lusaka Central Club, Lusaka Playhouse, and Lusaka Flying Club. I saw with my own eyes a bunch of alcoholic graduates. Zambian intellectuals work from eight to five and spend the evening drinking. We don’t. We reserve the evening for brainstorming.”

He looked me in the eye.

“And you flying to Boston and all of you Zambians in the Diaspora are just as lazy and apathetic to your country. You don’t care about your country and yet your very own parents, brothers and sisters are in Mtendere, Chawama, and in villages, all of them living in squalor. Many have died or are dying of neglect by you. They are dying of AIDS because you cannot come up with your own cure. You are here calling yourselves graduates, researchers and scientists and are fast at articulating your credentials once asked—oh, I have a PhD in this and that—PhD my foot!”

I was deflated.

“Wake up you all!” he exclaimed, attracting the attention of nearby passengers. “You should be busy lifting ideas, formulae, recipes, and diagrams from American manufacturing factories and sending them to your own factories. All those research findings and dissertation papers you compile should be your country’s treasure. Why do you think the Asians are a force to reckon with? They stole our ideas and turned them into their own. Look at Japan, China, India, just look at them.”

He paused. “The Bwana has spoken,” he said and grinned. “As long as you are dependent on my plane, I shall feel superior and you my friend shall remain inferior, how about that? The Chinese, Japanese, Indians, even Latinos are a notch better. You Africans are at the bottom of the totem pole.”

He tempered his voice. “Get over this white skin syndrome and begin to feel confident. Become innovative and make your own stuff for god’s sake.”

At 8 a.m. the plane touched down at Boston’s Logan International Airport. Walter reached for my hand.

“I know I was too strong, but I don’t give it a damn. I have been to Zambia and have seen too much poverty.” He pulled out a piece of paper and scribbled something. “Here, read this. It was written by a friend.”

He had written only the title: “Lords of Poverty.”

Thunderstruck, I had a sinking feeling. I watched Walter walk through the airport doors to a waiting car. He had left a huge dust devil twirling in my mind, stirring up sad memories of home. I could see Zambia’s literati—the cognoscente, intelligentsia, academics, highbrows, and scholars in the places he had mentioned guzzling and talking irrelevancies. I remembered some who have since passed—how they got the highest grades in mathematics and the sciences and attained the highest education on the planet. They had been to Harvard, Oxford, Yale, Massachusetts Institute of Technology (MIT), only to leave us with not a single invention or discovery. I knew some by name and drunk with them at the Lusaka Playhouse and Central Sports.

Walter is right. It is true that since independence we have failed to nurture creativity and collective orientations. We as a nation lack a workhorse mentality and behave like 13 million civil servants dependent on a government pay cheque. We believe that development is generated 8-to-5 behind a desk wearing a tie with our degrees hanging on the wall. Such a working environment does not offer the opportunity for fellowship, the excitement of competition, and the spectacle of innovative rituals.

But the intelligentsia is not solely, or even mainly, to blame. The larger failure is due to political circumstances over which they have had little control. The past governments failed to create an environment of possibility that fosters camaraderie, rewards innovative ideas and encourages resilience. KK, Chiluba, Mwanawasa, and Banda embraced orthodox ideas and therefore failed to offer many opportunities for drawing outside the line.

I believe King Cobra’s reset has been cast in the same faculties as those of his predecessors. If today I told him that we can build our own car, he would throw me out.

“Naupena? Fuma apa.” (Are you mad? Get out of here)

Knowing well that King Cobra will not embody innovation at Walter’s level let’s begin to look for a technologically active-positive leader who can succeed him after a term or two. That way we can make our own stone crushers, water filters, water pumps, razor blades, and harvesters. Let’s dream big and make tractors, cars, and planes, or, like Walter said, forever remain inferior.

A fundamental transformation of our country from what is essentially non-innovative to a strategic superior African country requires a bold risk-taking educated leader with a triumphalist attitude and we have one in YOU. Don’t be highly strung and feel insulted by Walter. Take a moment and think about our country. Our journey from 1964 has been marked by tears. It has been an emotionally overwhelming experience. Each one of us has lost a loved one to poverty, hunger, and disease. The number of graves is catching up with the population. It’s time to change our political culture. It’s time for Zambian intellectuals to cultivate an active-positive progressive movement that will change our lives forever. Don’t be afraid or dispirited, rise to the challenge and salvage the remaining few of your beloved ones

Kukutente23:
Collecting tax will not grow in time to pay for subsidies either
$582bn let it sink in

Kuwait's SWF is $514bn

LET IT SINK THROUGH YOUR THICK AGBADO SKULL!!

nairalanda1:
Well, since this thread has gone down the drain, because I have lost my temper and am no longer acting mature...here is the summa of my beliefs.

Opinion
Pass the Books. Hold the Oil.
Thomas L. Friedman
By Thomas L. Friedman
March 10, 2012
Share full article


308
EVERY so often someone asks me: “What’s your favorite country, other than your own?”

I’ve always had the same answer: Taiwan. “Taiwan? Why Taiwan?” people ask.

Very simple: Because Taiwan is a barren rock in a typhoon-laden sea with no natural resources to live off of — it even has to import sand and gravel from China for construction — yet it has the fourth-largest financial reserves in the world. Because rather than digging in the ground and mining whatever comes up, Taiwan has mined its 23 million people, their talent, energy and intelligence — men and women. I always tell my friends in Taiwan: “You’re the luckiest people in the world. How did you get so lucky? You have no oil, no iron ore, no forests, no diamonds, no gold, just a few small deposits of coal and natural gas — and because of that you developed the habits and culture of honing your people’s skills, which turns out to be the most valuable and only truly renewable resource in the world today. How did you get so lucky?”

That, at least, was my gut instinct. But now we have proof.

A team from the Organization for Economic Cooperation and Development, or O.E.C.D., has just come out with a fascinating little study mapping the correlation between performance on the Program for International Student Assessment, or PISA, exam — which every two years tests math, science and reading comprehension skills of 15-year-olds in 65 countries — and the total earnings on natural resources as a percentage of G.D.P. for each participating country. In short, how well do your high school kids do on math compared with how much oil you pump or how many diamonds you dig?

The results indicated that there was a “a significant negative relationship between the money countries extract from national resources and the knowledge and skills of their high school population,” said Andreas Schleicher, who oversees the PISA exams for the O.E.C.D. “This is a global pattern that holds across 65 countries that took part in the latest PISA assessment.” Oil and PISA don’t mix. (See the data map at: http://www.oecd.org/dataoecd/43/9/49881940.pdf.)

As the Bible notes, added Schleicher, “Moses arduously led the Jews for 40 years through the desert — just to bring them to the only country in the Middle East that had no oil. But Moses may have gotten it right, after all. Today, Israel has one of the most innovative economies, and its population enjoys a standard of living most of the oil-rich countries in the region are not able to offer.”

So hold the oil, and pass the books. According to Schleicher, in the latest PISA results, students in Singapore, Finland, South Korea, Hong Kong and Japan stand out as having high PISA scores and few natural resources, while Qatar and Kazakhstan stand out as having the highest oil rents and the lowest PISA scores. (Saudi Arabia, Kuwait, Oman, Algeria, Bahrain, Iran and Syria stood out the same way in a similar 2007 Trends in International Mathematics and Science Study, or Timss, test, while, interestingly, students from Lebanon, Jordan and Turkey — also Middle East states with few natural resources — scored better.) Also lagging in recent PISA scores, though, were students in many of the resource-rich countries of Latin America, like Brazil, Mexico and Argentina. Africa was not tested. Canada, Australia and Norway, also countries with high levels of natural resources, still score well on PISA, in large part, argues Schleicher, because all three countries have established deliberate policies of saving and investing these resource rents, and not just consuming them.

Image
Thomas L. Friedman
Credit...Josh Haner/The New York Times
Add it all up and the numbers say that if you really want to know how a country is going to do in the 21st century, don’t count its oil reserves or gold mines, count its highly effective teachers, involved parents and committed students. “Today’s learning outcomes at school,” says Schleicher, “are a powerful predictor for the wealth and social outcomes that countries will reap in the long run.”

Economists have long known about “Dutch disease,” which happens when a country becomes so dependent on exporting natural resources that its currency soars in value and, as a result, its domestic manufacturing gets crushed as cheap imports flood in and exports become too expensive. What the PISA team is revealing is a related disease: societies that get addicted to their natural resources seem to develop parents and young people who lose some of the instincts, habits and incentives for doing homework and honing skills.

By, contrast, says Schleicher, “in countries with little in the way of natural resources — Finland, Singapore or Japan — education has strong outcomes and a high status, at least in part because the public at large has understood that the country must live by its knowledge and skills and that these depend on the quality of education. ... Every parent and child in these countries knows that skills will decide the life chances of the child and nothing else is going to rescue them, so they build a whole culture and education system around it.”

Or as my Indian-American friend K. R. Sridhar, the founder of the Silicon Valley fuel-cell company Bloom Energy, likes to say, “When you don’t have resources, you become resourceful.”

That’s why the foreign countries with the most companies listed on the Nasdaq are Israel, China/Hong Kong, Taiwan, India, South Korea and Singapore — none of which can live off natural resources.

But there is an important message for the industrialized world in this study, too. In these difficult economic times, it is tempting to buttress our own standards of living today by incurring even greater financial liabilities for the future. To be sure, there is a role for stimulus in a prolonged recession, but “the only sustainable way is to grow our way out by giving more people the knowledge and skills to compete, collaborate and connect in a way that drives our countries forward,” argues Schleicher.

In sum, says Schleicher, “knowledge and skills have become the global currency of 21st-century economies, but there is no central bank that prints this currency. Everyone has to decide on their own how much they will print.” Sure, it’s great to have oil, gas and diamonds; they can buy jobs. But they’ll weaken your society in the long run unless they’re used to build schools and a culture of lifelong learning. “The thing that will keep you moving forward,” says Schleicher, is always “what you bring to the table yourself.”

SAUCE


Apparently my wanting the above means I am agbado.

nairalanda1:
So, we don't pay for subsides. Simple. We still raise tax, but use it for things like schools and healthcare. As many sane countries do. We can't do like KUwait because Kuwait produces more oil than we do for 5 million people.

And we don't borrow at all

And our economy would grow.

But you want us to borrow more. And you get upset when it is pointed out.

See how immature you are.

Kukutente23:
We can't do like Kuwait because Kuwait has SWF of $514bn while we're have looted wealth of $582bn. Stop making excuses for corruption.

nairalanda1:
So, as you said, we borrow.

Kukutente23:
So what?
Every country borrows

Therefore tinubu was right to borrow, as was Buhari.

get that into your agbado brain

nairalanda1:
As for me, we need our Millei, Park, Kwam Yeu and Deng now.