English Pages, 18. 3. 2016
Many thanks for the invitation to visit Morocco, one of the most stable African countries, and to attend this important, truly international gathering. Many thanks for giving me the chance to address this distinguished audience, selected and put together by my good old friend Mr. Carteron and his Crans-Montana Forum colleagues.
To speak here I take as a great challenge. I must admit that I don´t know Africa, this great, diverse and colourful, complicated but promising continent, which has been recently moving visibly upwards, sufficiently well. I have had an opportunity to visit Africa only on official state visits which is not the best way to see and understand a country, a region, not to speak about a whole continent.
The topic – to speak about the state of the world – Mr. Carteron suggested to me is impossible to seriously deal with. I tried to tell him that but he insisted. So I am here, but feel like facing a very demanding, hopefully friendly tribunal.
I am not able to look at Africa and at the rest of the world as if from the skies. I don´t possess the privilege of having a God-like perspective. I approach the topic of my today´s speech from a very specific perspective, from an old, historic city of Prague, from a small Central European, former communist, now EU country. It is neither the traditional West, nor the East, neither a top ten GDP per capita country, nor a developing country. It is definitely not the South. This perspective and being aware of it seems to me crucial.
At the very beginning, I would like to be very clear and straightforward by stressing that I didn´t come here to give anyone an advice. This – perhaps slightly unusual – statement is based on my experience with being the object of receiving a lot of advice in the crucial moments of our post-communist transition. Immediately after the fall of communism, the hordes of all kinds of would-be advisors and do-gooders arrived into my country, then Czechoslovakia, now the Czech Republic, without the benefit of having the slightest knowledge of the situation in the country, without understanding communism and its complicated heritage, without humbly accepting the enormity of the task to make a fundamental systemic change. They were, nonetheless, coming full of self-confidence and arrogance.
It was difficult for us to come to terms with it. We were fascinated by the fact that we were finally free and wanted to get a chance to find our own way out of communism towards sovereignty, towards a politically free society and efficiently functioning market economy. That was, however, not in the interest of advisors, consultants, representatives of powerful international economic organizations, not to mention investment bankers. They wanted to maximize their incomes, profits, fame and prominence, not to minimize the costs of our transition. I suspect you, in Africa, have the same or very similar experience.
(As a side remark, let me say that at that time one of my first tasks in my new office, in the Ministry of Finance, which was in charge of the whole economic transformation, was to form a special department to deal with foreign advisors. We were happy that we became finally able to freely cross the borders of our – in the past – more or less closed country. We considered a historic event that the impenetrable entry and exit visa system was abolished. The problem with foreign advisors was so serious that I dared to publicly make an ironic statement that it would be useful to introduce a special visa regime for foreign advisors.)
Africa, similarly, needs a systemic transformation in most of its countries and this process has to respect the existing, deeply rooted, socially and culturally gradually formed preconditions and structural characteristics of the continent. The transformation needn´t be based on the import of models, institutional arrangements, and/or behavioural patterns from somewhere. “There is not and I am sure there will never be any science of transition, or transitology” is a quotation from my only previous, four years old speech I made here in Morocco. Africa has to find its own way based, of course, on certain, widely shared principles of economics and other social sciences (see my more than two decades old piece entitled “Ten Commandments of Transition”).
When I repeatedly rejected to accept the views and suggestions of experts from the IMF and the World Bank, I used to tell them that I studied the same textbooks as they did and keep reading the same academic quarterly journals as they do. They didn´t have then and don´t have now a better knowledge than most of us. There is no doubt that there is a sufficient number of well-educated, knowledgeable, highly sophisticated domestic experts in Africa these days. They shouldn´t be blocked in their efforts by a pre-fabricated wisdom of foreign experts (and especially of emissaries of various powerful international economic institutions).
The issue of transition has many dimensions, one of them is the long lasting debate about the role of foreign aid in overcoming the barriers to development. I have – both as an economist and as a politician – very radical views about it. I fully endorse the position of the late British economist Peter Bauer and his followers about the irrationality and counterproductiveness of the old-fashioned state to state (or government to government) foreign aid. We have to insist that there is only one effective way of helping less developed countries – it is the free trade, the elimination of all kinds of trade barriers, the end of discrimination and of protectionism.
This used to be an almost undisputable wisdom but these ideas have gone out of fashion in recent times. The developed countries, the donors, have been successful in brushing them aside. They want to feel good by giving aid, regardless its effectiveness and regardless who pays for it at the end. Again, I have a personal experience in this respect. After the fall of communism Europe spoke vehemently about helping us but its politicians, vested interests groups and all kinds of rent-seekers considered the West-European protected markets sacrosanct. And for us difficult to enter.
My “modest” recommendation for Africa is to promote all free trade arrangements which are within reach. On one condition – the elimination of tariffs (custom duties) shouldn´t be replaced by the not less damaging introduction of obligatory so called standards which the already developed economies can afford, but the developing countries cannot. They form the new, in many cases not less prohibitive barriers to free trade and economic growth. These “standards” (social, environmental, health, hygienic, labour, etc.) shouldn´t be set arbitrarily and shouldn´t be obligatory – they should remain voluntary because they have to reflect the level of economic development of countries in question.
The crucial precondition for a successful development is the orderly functioning state. Africa should avoid falling into the same trap as Europe did. The currently dominant, politically correct thinking in Europe asks to get rid of the states and to transfer the decision making to the continental level. This anti-nation (or anti-nationstate) ideology is wrong and counterproductive. “A well functioning state, based on the constitution and the rule of law, is the precondition for freedom, not its threat”. I would say for prosperity as well.
The currently promoted version of the European integration (with its weakening of the states) lies at the root of the current European problems (the unsuccessful currency unification and its victims, the economically weaker states of the Eurozone, is one example, the naïve elimination of borders in the Schengen system and its consequence – the historically unprecedented migration into Europe, another one).
A democratic and economically viable system presupposes the existence of a coherent, sufficiently homogenous and identity-sharing entity, traditionally called a state, which can be formed only at the level of a country, not in the whole continent. The economies of scale (so glorified in economic textbooks) are much smaller than the diseconomies connected with the absence of functioning states. African continent needs a friendly cooperation of African states, not the total fragmentation of the continent into provinces or ethnic groupings by weakening the states and by creating a centralistically ruling, remote, and therefore untouchable, post-democratic all-Africa embracing authority à la Europe.
Politically correct multiculturalists, environmentalists, interventionists and utopians of all kinds and colours (which means non-believers in human ingenuity) are opposing the institution of the state with the argument that the main and only problem of mankind is freedom vs. oppression clash (or individual vs. state clash) and are underestimating another, not less fundamental issue which is a trade-off between order and disorder, between order and chaos (or anarchy).
The experience teaches us that liquidating existing states doesn´t help much in increasing freedom but leads directly to the magnification of chaos, anarchy and disorder. Some parts of Africa have been exposed to it for a long time. To get rid of disorder requires a functioning state administration – based on as broad as possible consensus of citizens (by means of democratic elections). The real challenge for Africa is how to build states when there are no nations of the European (or Western) style. In such a situation the state is not easily formed. It will take time to do it.
Africa is an integral part of the contemporary highly interconnected world. Is the undergoing transformation of the world order and power structure we currently witness contributing positively to African developments or vice versa? I am not sure about it. There are some positive signs. Africa has achieved some undeviable economic growth. China´s entry into Africa – both as a customer and an investor – seems to be another positive factors. The parallel growth of many successful emerging markets in all continents is a help also. The return of multipolarity has been changing the world and bringing new opportunities. Etc., etc.
The shift from bipolarity which prevailed in the communist era to the unilateral American dominance 25 years ago didn´t last long. This transitory era started positively. The rise of political democracy and market economy in many countries as a consequence of it can´t be denied. But it has had its non-negligible less positive aspects as well:
- the original era of authentic democratic and free market-oriented reforms, facilitated by the fall of communism, had been gradually replaced by the non-authentic and from outside enforced exports of democracy which was accompanied by serious detrimental side-effects (the so-called Arab Spring with its undermining of the old non-democratic, but stable regimes, is one such example);
- the hasty attempts to unify, centralize, de-nationalize and de-democratize Europe (together with the victory of postdemocratic, redistributive, antimarket, antiindividualistic ideology there) severely undermined the European continent, its freedom and prosperity, its role in the world;
- the genuine, gradual, more or less expected (by anyone who is not blind or aprioristically anti-Russian) rebirth of Russia, with all its undisputable but in many respects unavoidable problems, was – as we see – neither welcome nor accepted by the West. The West used it to start a new wave of international confrontation, if not of a new cold war;
- the U.S. is nervously and impatiently searching for its proper role in the post-unilateral world. Its current behaviour in the Middle East, North Africa and the Ukraine is a world-destabilising activity which should be stopped as soon as possible;
- China (and some other BRICS countries) should be fully accepted as significant world players and should become an integral part of the decision-making in the current multipolar world. The structure of international institutions (especially of the IMF) should be adjusted to reflect this new situation.
A new danger to a healthy development, however, is of a different origin – I have in mind the large-scale, mass, non-individual migration. The people migrated in the past as well, but migrated slowly, mostly individually, and in most cases at short distances. Sometimes they were searching for new life opportunities, sometimes they were fleeing an unbearable situation at home. This was understandable but migrants knew that they were undergoing a very risky personal adventure with unclear results. They were escaping from somewhere without having any guarantee about the future. They didn´t consider migration their right. They only hoped that they would not be sent back. This is not the case now.
The pseudohumanistic ideologies of humanrightism, of non-discrimination, of multiculturalism, of political correctness created an atmosphere in which mass, non-individual migration is considered a human right that should be respected under all circumstances. This destructive thinking can´t be accepted. This is a way how to destroy the world as we know it.
I know it looks differently from Africa but I do believe that even in Africa stable, functioning, rules-keeping societies have been many times in the past exposed to a violent unwelcome migration. But it was always considered a violation of widely accepted rules. It is different now. The contemporary advocates of the new model of thinking have been using the ideology of humanrightism as a justification for an almost free and unrestricted movement of migrants from one country to another. To stop this way of thinking is one of the main challenges for the current era. All of us should accept that normal is not to migrate. Africa needs its best people at home. They should contribute to its future prosperity. To motivate them to go to Europe as cheap labour force is a counterproductive behaviour.
Let me conclude by stressing my firm conviction that Africa is not a failed continent which should be depopulated by means of mass migration. It has achieved a visible progress and growth in the last decades which will – undoubtedly – continue in the years to come. I wish you and Africa all the best.
Thank you for your attention.
 Klaus, V., “How Regimes Collapse and How to Go Back to Liberty?”, Mont Pelerin Society Regional Conference, Fès Medina, Morocco, 21 April 2012, www.klaus.cz/clanky/3085.
 Klaus, V., “Ten Commandments of Transition”, The Group of Thirty, Vienna, April 1993, also published in Klaus, V., Renaissance: “The Rebirth of Liberty in the Heart of Europe”, CATO Institute, Washington D.C.,1997.
 See my speech at the last year´s Rhodes Forum “Future of International Development Institutions – Can Their Failures Be Even Bigger?”, www.klaus.cz/clanky/3815.
 See also Lal Deepak, Poverty and Progress, CATO Institute, Washington D. C., 2013. My review of it in Lidové noviny, November 2013 (in Czech).
 Czech philosopher Pavel Barša, Právo, February 11, 2016.
 See my recent speeches. Klaus, V., “Valdai´s Debate about Threats: The Threat Is Us”, Valdai Discussion Club, Sochi, October 22, 2015, www.klaus.cz/clanky/3825 and ”Is Europe Endangered by Euroscepticism and Populism or by Something Else?“, Europaeum´s Summer School, Carolinum, Prague, August 31, 2015, www.klaus.cz/clanky/3790.
 See my contribution “Russia on Political and Economic Map of the World: A View from Prague”, Jubilee International Union of Economists publication, April 2016, Moscow.
Václav Klaus, Preliminary Draft for the Dakhla Speech, Crans Montana Forum, Dakhla, Morocco, March 18, 2016.
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