Plotting the Way out of Crisis By Kayode Komolafe

The vision and promise of the United Nations is that food, healthcare, water and sanitation, education, decent work and social security are not commodities for sale to those who can afford them, but basic human rights to which we are all entitled – Antonio Guterres

Secretary-General of the United Nations Antonio Guterres said last Saturday that “inequality defines our time.”

He gave the 2020 edition of the yearly lecture to mark the 92nd birthday of the authentic African hero, Nelson Mandela.

The occasion was organised by the Nelson Mandela Foundation in South Africa. It was incidentally the first virtual edition of the lecture.

According to Guterres, mankind faces the deepest global recession since the end of World War II in 1945. In his estimation, what has happened could be described as the broadest collapse in incomes in the last 150 years.

As a result, there is the risk that a hundred million more people could be pushed into extreme poverty and nations could witness famines of historic proportions.

Maybe, some members of his audience might say that, for a diplomat, Guterres’ tone was rather polemical as he spoke on “Tackling the Inequality Pandemic: A New Contract for a New Era.”

It’s a welcome polemic.

You would be right to say that was probably because we live in unusual times and the crisis at hand requires critical thinking in order to come up with efficacious solutions.

In any case, Guterres defined the moment correctly.

It is, therefore, suggested that those who lead the process of plotting Nigeria’s path out of the crisis and making projections for the post-COVID-19 economy, society and even polity should pay adequate attention to the currents of ideas for solutions around the globe.

It is another indication that this is no time to rely exclusively on the neo-liberal recipes in putting together economic recovery packages. For decades now, policymakers have been going to the same shelf to pick solutions approved by exogenous powers even when the people find the formulas bitter.

This crisis should compel a radical rethink of policy options.

The nation’s economic managers should go beyond the routine of always talking about oil price, privatisation, GDP, growth rates, Fitch rating, exchange rates etc. in planning critically for the future of tens of millions of Nigerian youths. These young citizens constitute the majority of the population. Making a global survey of poverty and precarity, Guterres declared:

COVID-19 has been likened to an X-ray, revealing fractures in the fragile skeleton of the societies we have built.

It is exposing fallacies and falsehoods everywhere;

The lie that free markets can deliver healthcare for all;

The fiction that unpaid care work is not work;

The delusion that we live in a post-racist world;

The myth that we are all in the same boat.

Because while we are all floating on the same sea, it’s clear that some of us are in superyachts while others are clinging to the floating debris.

The import of the honest liberal challenge that Guterres has thrown to leaders of nations is that in designing solutions to the socio-economic problems triggered by the novel coronavirus, it would be pretentious to claim ideological neutrality in making policy choices.

The historical truth is that some policies can put the rich at a greater advantage while some other alternative policies could have the effect of lifting millions out of poverty.

The urgent call to make here is for the governments at all levels to deliberately embark on pro-poor policies. This is important in order to sincerely tackle poverty and inequality.

So, the ideas informing the policy choices matter a great deal.

And talking about ideas, it is not only anti-capitalist radicals who are opposed to the plagues of poverty and inequality.

There are those who genuinely want to fix capitalism, but who are perceptive enough to see that the system is doomed if nothing urgent is done about the rising tide of human misery. They are convinced that the present socio-economic order in which the affluent 1% is pitched against the rest of humanity is simply unsustainable.

Some scholars have pushed the discussion to a more theoretical level. These thinkers actually want to save capitalism from itself. One of them is the celebrated French economist Thomas Piketty. He argues against inequality eloquently in his latest book released in March, Capital and Ideology, which he calls a “sequel” to his earlier well-received Capital in the Twenty-First Century. Five years ago, Piketty said in a newspaper interview that: “I believe in capitalism, private property and the market.”

However, Piketty now argues more vigorously in his new book that extreme inequality plaguing the socio-economic landscape could not be justified. He traces the origins of ideologies that have justified inequality for centuries. His approach is not just that of technical economics. He amply draws from history, sociology, literature, philosophy and political science to make the point that ideas dominating policies are not natural. He demonstrates that they are all human constructs that can change because of the problems at hand. He cites examples from different countries to make the point about the danger of global inequality. By the way, the examples cited from Nigeria by Piketty in his 1,093-page volume are from the stories in the novels of Chimamanda Adichie on issues of immigration.

Piketty makes a number of suggestions that policymakers could try in tackling inequality. For instance, he proposes redistribution of wealth using the instrumentality of a more effective taxation of the rich and the reconstruction of political power. He puts it like this: “The study of history has convinced me that it is possible to transcend today’s capitalist system and to outline the contours of a new participatory socialism for the twenty-first century – a new universalist egalitarian perspective based on social ownership, education and shared power…”

A systemic view of the crisis is important. To a large extent, the problems of insecurity, corruption, poor productivity, governance incompetence, ethnic tension, religious crisis etc. are symptoms of and responses to a system in decay. To combat these manifestations of the systemic breakdown, the socio-economic questions must be answered on the side of justice.

Beyond the symptoms are the structural roots of a system based on socio- economic injustice. Corruption, for instance, is second nature to capitalism. The logic of the system legitimises many vices bedevilling the society.

After all, what passes for economic management is a little more than merely making a sense out the misery of the people.

The global harvest of ideas for the resolution of the crisis and advancement of human progress should be instructive to those responsible for managing the economy.

The National Economic Council, the constitutional body created to co-ordinate national economic affairs, should be energised to perform this role at this critical period.

The council, chaired by Vice President Yemi Osinbajo with all the governors and key national economic appointees as members, clearly has its job cut out for it. But the task may not be as gargantuan as it may seem if the government engages the different interest groups and classes productively.

To evolve a coherent national response to the crisis, the role of the council is more fundamental than those of the fire-fighting committees that the government may set up on different aspects of the crisis.

In this respect, the government should be receptive to the ideas from different forces.

One of such groups that the government should consider its proposals is that of the Alliance on Surviving COVID-19 and Beyond (ASCAB). The alliance has not only made a radical critique of the Economic Sustainability Plan of the government, it has also suggested policy alternatives.

Incidentally, the Vice President is also the chair of the ad hoc committee that put together the plan.

The plan could be called Nigeria’s own “stimulus package” in the pattern of different plans by countries around the world. Apart from the usual fiscal and monetary tinkering and budgetary adjustments, the plan is focussing on “projects and policies” in the real sector with the prospective benefits of job creation among others. Areas of emphasis include mass agricultural projects, public works, mass housing, digital technology and building safety nets.

For instance, embodied in the plan is the proposed cultivation of between 20,000 and 100, 000 hectares of land in each state with the expected job creation prospects. About 300, 000 new homes are proposed to be built under the plan while the materials would be sourced locally for constructions given the problems of importation amidst the crisis.

The implementation plan is also well articulated in the government’s plan.

The ASCAB’s response is that as beautiful as the government’s plan appears on the surface, it has failed to fundamentally address the scandalous inequality in the Nigerian system which coronavirus has exposed. ASCAB says the government’s plan is essentially the usual neo-liberal package for the International Monetary Fund (IMF) and the World Bank to approve.

The criticisms of the alliance are valid and the alternatives proposed are worth pondering by policymakers.

As an alternative, for instance, ASCAB is calling for increased funding of healthcare delivery as well as public education. The alliance is calling for huge investments in the provision of water and sanitation. It also wants the social register to be made more comprehensive in the programme of building social safety nets.

How can the government’s plan be sustainable when there are no visible efforts to invest in basic needs of the poor who are the worst victims of the crisis? You cannot be slashing health and education budgets and expect to achieve a sustainable plan. The capacity of the existing health facilities should be enhanced while new ones should be built.

Research and innovation should be well funded and encouraged if the slogan of sustainability is to be taken seriously.

The fundamental challenge here is that policymakers do not seem to accept the reality that in economic management coronavirus has compelled what Thomas Kuhn in his Structure of Scientific Revolutions calls “paradigm shift.”

The basic fact that with the existing paradigm, poverty has not been tackled fundamentally for decades should make those in charge of policy to pause and be more critical.

The moral of it all is that to exit the crisis and achieve sustainable development, policies should be better humanised.