Comparing Ghana to Singapore

Economic Benefits of Singapore?s Educational Reforms Policy (Part 3)

What ever happened to Ghana when in the 1960s Ghana and Singapore were all third word countries? What (has) happened to Nkrumah?s built factories/industries like Tema Steelworks, Ltd., in the Greater Accra Region, and two other sites located at Mpintsin and Ashiem near Takoradi; Tema Chocolate Factory, and Kumasi Jute Factory? To name a few.

While Ghana still remains agrarian our governments have not even made any substantial effort to mechanize our farming system. The over 60% of our farmers rely on manual labor. Most of these farms do not even have road access. Not only do our farmers still rely on cutlass and hoes but they have to walk tens of miles in order to get to their farms. Those who live closer to their farms have no access to any infrastructure. Not even good drinking water. Could our government not have engaged Kwame Nkrumah University of Science and Technology (KNUST) to develop basic technology (to help our farmers) with Nkrumah?s built Tema Steelworks, Ltd. in the Greater Accra Region, and two other sites located at Mpintsin and Ashiem near Takoradi? Why is Ghana government today bent on selling every legacy Nkrumah left us including our national parks?

Ghana has deserted and or sold her local factories and industries thanks to the IMF over dose divestiture pill. By 1979 the Government of Singapore had began embarking upon a major restructuring of the economy into one which is higher value added, high technology and more capital intensive. Mechanization, automation and computerization of industry were promoted. It may interest you to know that ?Singapore's market-oriented achievements are based on government leading - not private entrepeneurs - all Singaporean transnationals are government-owned - there is not a single significant privately owned economically significant Singaporean owned company - the issue from our point of view is that the Singaporean government is and has been from the mid-1960s a serious government?( Kwame Mfodwo, Lecturer Monash Law School). Tax incentives were granted. A 3-year high wage policy was recorded by the National Wages Council for 1979 - 81. As a result labor costs increased sharply rising 10.1% annually between 1979 and 1984 compared to a yearly productivity increase of only 4.4%. A foreign worker levy was introduced in 1982 to discourage the use of skilled foreign workers.

GHANA AND PRIVATIZATION POLICY: JOBS & INVESTMENT

While indigenous capitalism is practiced in Singapore attracting (AND EVEN DEPENDING ON) foreign direct investment remains a key objective of Ghana's economic recovery program, which started in 1983 under the auspices of the World Bank and the IMF. Ghana embarked on a privatization program in the early 1990s that has resulted in the sale of more than 300 of approximately 350 state-owned enterprises. India basically controls the economy of Ghana today in terms of foreign investments. Foreign firms comprise most (if not all) of the bidders for these state enterprises/businesses. Foreign direct investment (FDI) in Ghana from September 1994 to December 1, 1999 was $205.46 million. In 2000 it was $114.91million, $89.32 million in, 2001, $58.93 million in 2002, $88.06 million in 2003, and $143.73 million in 2004. Foreign direct investment (FDI) in USD million show that between September 1994 and September 2005, the U.S. ranked fifth in terms of number of investment projects (131) after India (201), China (189), Great Britain (187), and Lebanon (154).

Sadly, these multi-national companies don?t even pay taxes and if they do it goes into the pockets of some politicians. The report on the activities of the Afrik-Shandong Limited and Zhongha Fisheries Limited reveal that between 1994 and 1998, Afrik-Shandong Ltd landed and re-exported fish but refused to pay taxes totaling $7,974,338.83. Zhongha Fisheries Ltd is said to have landed and re-exported fish between 1995 and 1999 and evaded $7,382,897.36 tax, bringing the total liability of the two companies to $15,357,236.19. How did this happen under Rawlings and the NDC?s watch?

The report also described the profits made by the two companies in their operations in Ghana between 1993 and 2001 as supernormal and said they had more than paid for the overstated costs of their vessels. Mr. Appiah, the Ghanaian Deputy Managing Director of the two companies, they were made to pay ?106 billion to the SFO and when later they enquired about the state of affairs, they were told that there were no adverse findings against them. According to Mr. Appiah, when the investigations were going on, the Income Tax Audit Unit also came to audit Afrik-Shandong Limited and Zhongha Fisheries Limited?s accounts and they were made to pay $200,000 as penalty, after which they were exonerated. According to Mr. Appiah ?The Customs, Excise and Preventive Service (CEPS) also came in around that same time and made them pay ?980 million as custom duties and the receipts are there to show. According to Mr. Appiah, the two companies were owned by the Chinese government and that their earnings and taxes were audited periodically by the Chinese Embassy in Ghana (Daily Graphic March 20, 2006).

?Power should be thought of more in relational than quantitative terms and as a dynamic concept that operates within both formal and informal (and both internal and external) relationships. Identifying where power lay is therefore fundamental? (Adrian Leftwich, Senior Lecturer, University of York). According to Leftwich the formation and functioning of the classic developmental states of East Asia is partly due to a number of shared defining features:

(i) The politics of these states had been developmentally driven and their development objectives had been driven by political concerns;

(ii) A perceived external threat had been a significant incentive for the formation of developmental states based on political and economic nationalism;

(iii) An external threat had also provided a powerful incentive for elite coherence, unlikely to have been generated by internal demand alone (Re)building Developmental States: From Theory to Practice).

So who in control or is protecting the people of Ghana? The government of Ghana or the governments of the foreign investors? An enquiring mind wants to know.

Giving Ghana?s foreign investment figures above and comparing it to the over $2 billion remittances of the Ghana Diaspora it is crystal clear that Ghana government is not only ignorant of the potential wealth of Ghanaians but also politically unwise in writing her investment code only to suit foreigners. This is how the US Department of State describes Ghana?s economic potential: ?Few local investors have sufficient capital to participate in this process (privatization program) except as partners with foreign firms.?

According to GIPC, the minimum capital required for foreign investors is USD 10,000 for joint ventures with Ghanaians or USD 50,000 for enterprises wholly owned by non-Ghanaians. Trading companies either wholly or partly-owned by non-Ghanaians require a minimum foreign equity of USD 300,000 and must employ at least ten Ghanaians. So which Ghanaians form the integral part of the 300 sold Ghana State Corporations out of the 350? An enquiring mind wants to know. So how is Ghana benefiting from these foreign investments vis-?-vis the neglected the indigenous capitalist?

According to the General News of Monday, 20 March 2006, for example, the Serious Fraud Office (SFO) has uncovered a fraudulent scheme involving two Chinese fishing companies Afrik-Shandong Limited and Zhongha Fisheries Limited, incorporated in Ghana in August 1993 and July 1994, respectively which has resulted in the loss of ?313.36 billion to the state (Daily Graphic General News of Monday, 20 March 2006). Their total liability to the state, in respect of evaded taxes and other non-tax related breaches, was calculated at ?32,641,819.45 or ?313.36b.A report by the SFO after months of investigations also indicted the Ghanaian Deputy Managing Director of the two companies, Mr. Emmanuel K. Appiah, and recommended his prosecution for ?having orchestrated and masterminded this massive fraud on the people of Ghana? (Daily Graphic March 20, 2006). We are waiting to see where this will end. This should be a test of Kufour and NPP?s seriousness of their zero tolerance slogans.

Ghana needs NEW leadership; of men and women with new attitudes and a drive to succeed. Like Singapore Ghana would need to take her destiny in her own hands. We can do it. Ghana has the qualified people to make the difference. Let's seek them and support them to the highest office in Ghana. Conventional wisdom teaches us that in order to progress we need to build upon what Ghana has and improve upon them. Do we improve by selling? Does Ghana government expect some positive results from the trend of privatization which seeks to fatten the pockets of a few top government officials? So far the records show that those Ghanaians who form the joint venture (percentage of Ghanaians) with the foreign investors are politicians who don?t pay a penny from their pockets. These are top government officials who not only demand some percentage cut from the foreign investors but also forge documents to claim shares? ?Notwithstanding the new procurement law, companies cannot expect complete transparency in locally funded contracts.

According to U.S. Department of State, there have been recent allegations of corruption in the tender process and the government has in the past set aside international tender awards in the name of national interest. American businesses have reported being asked for "favors" from contacts in Ghana, in return for facilitating business transactions. These favors could potentially conflict with U.S. business ethics or laws, and U.S. business visitors should make clear that U.S. companies operating abroad are subject to the Foreign Corrupt Practices Act of 1977(U.S. Department of State online). How come Ghana is not a signatory to the OECD, Convention on Combating Bribery?

How come Ghana cannot pass laws against bribery and corruption? How come Ghana is not seeing any impact from ?zero tolerance? policy? How come the Government of Ghana is dragging her feet in drafting a Freedom of Information bill, which will allow greater access to public information? Why is Ghana still ganging on to the antiquated laws on fraud prevention and control, namely the Exchange Control Act of 1960, the Corruption Act of 1965 and the Narcotics Control Act and their associated legislative instruments? Because it shields the politicians.

According to Arthur Kobina Kennedy, NPP presidential hopeful, to move forward as a nation, we must focus on making government work for people. ?This can be done first by fighting lawlessness and crime (both blue and white collar) with a larger and better-equipped police force. This should be augmented with more resources for investigative organs like CHRAJ and SFO as well as empowering the public to report crime, fraud, and abuse of office. A government that is unable to protect the public from crime will have a difficult time convincing the public that it is effective? (Arthur Kobina Kennedy in his 2005 inaugural address).

Following the birth of SFO in 1999 it was reported to the President and Parliament cases of economic fraud that resulted in more than USD 2 million. Rather than the Government of Ghana dealing with the offenders the SFO called for a national debate on how to deal with largesse acquired through economic crimes and complained that the present punishment of dismissal and imprisonment is an inadequate deterrent. According to General News of Monday, 20 March 2006 the office for Special Duties of the Ministry of Finance and Economic Planning in collaboration with the Auditor-General's Department between 2001 and 2004 investigated and identified 10 trillion cedis embezzled funds between 1992 and 2000]] CHRAJ and SFO, remain but another government propaganda machine, a toothless bull dog.

Why can?t our government be open and allow Ghanaians who are solvent to compete for these bids for the privatization of state assets? Like Kennedy said in his inaugural address, ?the government can raise money through the floating of bonds to diasporans to fund specific development initiatives. Obviously, the granting of the vote to diasporans as planned in the Representation of the Peoples Assembly Act (ROPAA) will be a big step in this direction? (Ibid). No doubt, our chiefs must play a meaningful role in integrating its sons and daughters in the Diaspora in the development of their towns and villages (or make known such involvement) and influence the government to recognize the benevolence and expertise of the Ghanaian Diaspora in building our nation. Ghana will save money by employing the Ghanaian expertise than foreign consultants. Ghana cannot do away with traditional values if we are to pursue ?indigenous capitalism?. Our chiefs are so vital to the development and transformation of our country and the government of Ghana needs them so much than they need the government. So Ghana must choose a leader who respects chieftaincy and is willing to reform it to make it a vital part of Ghana's development.

We cannot talk of indigenous capitalism without due respect for traditional institutions. But this must begin with its reformation. Traditional values must be refined and respected if Ghana can unite giving the history behind chieftaincy. Kennedy wrote, "Let us modernize institutions like chieftaincy, parliament and the Electoral Commission to mention just a few. Chieftaincy, which is vital must be modernized and made accountable to the people and the law while respecting its ancient customs and rituals.

While traditional rulers like the Asantehene have been a visionary and progressive rulers, often Chieftaincy, has become a tool to divide people rather than unite them. Indeed we must move proactively to deal compassionately, justly and firmly with issues like the Dagbon crisis that is a ticking time bomb. We should not pass on difficult issues to future presidents, parliaments or people to deal with? (Arthur Kobina Kennedy). It is the hope of this author that Kennedy will device some detailed method or policy that will seek to make his vision a reality in Ghana when elected. The future of Ghana begins with passing anti-corruption laws and reforming Ghana?s education to meet the needs of a developing country. It must begin with changing our systems that encourage daylight robbery by government officials and her elite.

Ghana has to stop everything that it is doing now and backtrack to where everything stopped functioning in Ghana. Only then will we be able to right the ship. From 1966 to 2006 the country has been sinking with no end in sight. The terrible day in our history was Feb 24 1966. Perhaps it may suffice to say that to get Ghana to learn from Singapore ? it would be as much as necessary to pay a high market price for key people in the Singapore miracle to come three or four times a year to offer a detailed and well structured 2 week seminar at Greenhill or Legon and get cohorts of top civil servants, chiefs, military officers. The military must be included. Although this author is not advocating for any military adventurism he thinks it would be good if they also attend these seminars and had some ideas to transform an ailing economy. Hopefully paying a person from Lee Kuan Yew's support staff 100,000 US dollars to come to Ghana and give four seminars would be money much better spent than money going towards a video to promote Ghana in the United States or sending a whole entourage of the President on some Commonwealth conference meeting.