The sanitary crisis of the Covid 19 has sent ripples of panic leading to the tumbling of international stock markets indices.  Fortunately, stock market indices do not determine our economic prosperity, otherwise it would have long disappeared given that the investors’ moods constantly swing like a yoyo.

Economic resilience realistically depends on how well the current leadership has prepared their nations or organisations to face up to the challenges associated with major climatic changes. Many scientists have previously warned about the dangers of the destruction of our rainforests.  Their  gradual disappearance has encouraged wild animals such as bats to move to cities and spread their deadly diseases. We are now paying the price of our rigid approach to economic development.

Economic survival does not depend on short term profitability.  Growth, not accompanied by strong cash liquidity, assets with strong earning capability, an educated workforce and social resilience has a negative impact too. The Covid 19 has uncovered the true reality facing many organisations and nations.  The airline industry clearly illustrates this point. Low cost travel has been the main driver of growth of the industry. Today, these same airline companies are faced with limited options for their survival.

What kind of future can we aspire to? The impact of the Covid 19 pandemic resembles to what happened to Southern African countries during the high prevalence of the HIV/AIDS in the early 2000’s.  20% to 30% of their adult population was infected: many died.  The health systems (both private and public) were overwhelmed in trying to attend to the needs of the AIDS patients so that there were not enough resources for treating other illnesses.  HIV had also broken down many family structures and this poses considerable challenges for both state and social support systems. In containing the prevalence of HIV amongst their citizens, countries like Botswana had to divert substantial resources from productive investments.  Also, the size of the labour force, the availability of skills and productivity were some of the macro economic challenges that the Southern African countries had to deal with. Their economies inevitably slowed down and government revenues were adversely affected.

In light of the complexity of current socio economic situation, leaders must be adept at leveraging the wisdom and skills of their workforce, citizens and communities.  Adaptability, flexibility and creativity are all required for a strong movement towards the build up of economic resilience.   Embracing change has always been humanity’s means of innovation. The most brilliant of creators in history such as Leonardo Da Vinci were people whom you could not put in a box. They were not just scientists, engineers, just teachers, or just philosophers.  They had to draw from different courses of thinking and different disciplines to create disruptive innovation. They also refused to become so habit bound that familiar customs unthinkingly turn into ruts. Instead, they keep analysing their own track records, looking for new opportunities and unexpected misfires.  Working and living with personal integrity – the right kind of conviction – was their motto.

Our innovative minds have today produced e commerce, mobile money, virtual classrooms, etc. Technological changes can be a positive enabler of societal transformation.  In fact, Facebook, Zoom, What’s app came into our lives because we allowed them to.  Though our educational systems have not taught us to be agile, people do have the innate ability to stretch to meet the requirements of the prevailing situation.

The current economic and social situation actually results from our giving in to the thrill of enhanced size, illusory economic and political power. In short, being engaged with change also means maintaining our strong personal moral core if we are looking to build a better future.  Our perspectives on life have undoubtedly changed: whether for worse or better – is actually up to us.

The twentieth century witnessed a large increase in the life expectancy of a person. This is due to a number of scientific discoveries namely the penicillin, vaccination and significant advances in diagnostic technology such as X rays and MRI.  With deaths being pushed further and further back, many of the major health problems currently prevailing have gradually changed from infectious diseases to chronic diseases. They are now either due to our individual lifestyle choices (diabetes, for instance) or to the ageing process – the Alzheimer’s disease.

In other words, the past is definitely no longer a good predictor of the future.  Outlier events such as acts of terrorism, earthquakes have further demonstrated that our existing approach to building our future is obsolete. The most obvious example is the Covid 19 virus.  The world now requires every ounce of creativity that it can muster to create new economic and social conditions for a better future. To this effect, visionary leadership is now more than ever a competency that people would need to make this possible.

A visionary leader would set his priorities straight.  Saving the planet, for instance, would win over the need to give in to fads such as the phenomenon of “fast fashion”.  The visionary leader does not rely on third parties to preserve the environment.  His/her spending habits and lifestyle are mindful of his/her personal environmental footprint. Visionary leaders focus on a long-term vision and do not waiver to any herd like mentality for the sake of instant gratification.

A competent visionary leader has an insatiable curiosity about the perspectives and motivations of others. They love networking with people who are different from them. They use this knowledge to help correct their own personal (sometimes unconscious) biases against cultural, gender and social differences.  Visionary leaders constantly remind themselves that difference is not a liability but a potential for growth. It takes a strong personal commitment to practice an inclusive leadership style.

Visionary leaders are self aware. Their public image is authentic. They are not afraid of failing and are risk takers. They also do not delve into their mistakes too long and they do not shift the blame to competition, globalisation, immigration or to any third party. Humility is one of their personality traits.  They do recognise that change can be positive. For instance, globalisation has brought many positive changes such as the promotion of global vaccination programmes by the World Health Organisation. Similarly, immigration has, for some countries, been a much-needed source of labour in certain sectors of their economies.

Visionary leaders strongly believe that every man and woman is born equal. They do recognise that most nations’ cultural norms are rooted in a patriarchal history. Though prevailing laws and regulations protect women against discrimination, they don’t go far enough to provide a level playing field for women in their professional lives.  At work, women tend to use a different approach that can sometimes be perceived as being too soft.  Also, women are unfortunately perceived as being unable to handle the high levels of stress that comes with senior management positions.  A visionary leader would encourage her/his female team members to engage in mentorship arrangements with their male colleagues. These conversations would help to educate their male counterparts about the value of women’s leadership styles as women’s brains are wired differently.

Today’s world is constantly changing:  the emergence of AI (artificial intelligence), the increasing international mobility of people, regular changes in regulations etc. It is natural to wonder as a leader about the need to change, after all, you are at the top of the ladder.  It takes courage to be truly a visionary leader. Visionary leaders view work as part of their lifetime objectives.  They are determined to continuously learn new skills and knowledge to become better at what they do. They may reinvent themselves from time to time, making occasional career changes and taking sabbaticals to re educate themselves on an as – needed basis. They also do not view retirement as a permanent exit from her/his professional life. They have a more fluid interpretation of retirement as their human capital are far more valuable when it is being shared rather than being shelved

A country’s ability to thrive economically depends neither on its size nor on a privileged access to a pool of natural resources such as oil, precious minerals.  Countries with no natural resources such as Singapore have demonstrated that economic success is possible There are many key success factors that can help a nation on its path to sustained economic growth.

Social Capital

Communities with higher levels of social capital tend to have lower poverty rates, fewer incidents of violent crime and stronger democratic institutions. Nations with a healthy national identity are those whose people share the same constructions of the group identity and its boundaries. The absence of a clearly articulated national identity may lead to internal strife because it allows individuals to selectively use culture for their own self interests.

The Level Of Patronage In Wealth Creation

Nothing is more destabilizing than favouritism as it feeds discontent amongst those not benefiting from those “cozy relationships”.  It creates the illusion that wealth can only arise from “power” rather than from hard work and creativity.  Recent events in many countries have shown how discontent amongst the population can create havoc E.g “gilets jaunes” in France, Lebanon’s social unrest.  Wealth resulting from patronage is hugely risky too. Governments come and go leading to the possible fast “evaporation” of such wealth.

Innovation and Productive Investments

Also, the beneficiaries of such established order become the major hurdles to economic development. When success depends on the level of conformity and obedience, there is no ambition for excellence. There is no urge for imaginative speculation and no forward looking approach in handling present challenges.  Foreign investors tend to flee such politically charged environment. Opportunities dry up and the pool of talented skills gradually move overseas in search of better career prospects.

Efficient Allocation of Resources

Public expenditures on projects that have little value beyond pleasing constituents is a waste of public funds. Wrong allocation of public money can have dire consequences especially when it is a developing country. The state usually does not have the means to provide unemployment insurance and welfare programs that can pump more money into the economy when the economy is weak.

Level Of Public Debt

Another Key Performance Indicator (KPI’s) would be the size of the trade deficit of a country.  A trade deficit implies that a country as a whole is spending more than it is earning. When trade deficits are growing gradually, it actually means that imports are being funded by overseas borrowing that keeps growing.  The ability to repay debt depends, most of the time, on the state of global economy. For the past few decades, the level of uncertainty and volatility has increased so that a number of countries such as Barbados, Pakistan, Iceland have gone into bankruptcy.  The presumption seems to be that because something is legal, it is morally right. This approach is both morally wrong and economically and politically unviable.

The Health Status Of The Local Manufacturing Sector

According to a report from the World Bank Commission on Growth and Development (2008), thirteen countries have been able to sustain growth of 7% or more for twenty five years at a stretch. Eleven of them were manufacturers. As at today, this rule of thumb is still true. The most well known example is South Korea whose national brands such as LG, Samsung are now global household names.

Digitalisation

In today’s world economy, the economic performance of a nation is dictated, to a certain extent, to how well it has the required skills to capitalise on the technological revolution that is transforming a number of industries. The changes in technology are expected to have a bigger economic and social impact than globalization.

The Strength Of Public Governance

Unfortunately, politics tend to override economics very often, forcing actions that might not be in the best economic interests of the country as a whole. There is currently a huge democratic deficit in most countries – issues that are of importance to ordinary citizens don’t get the attention they deserve. A high level of transparency in the allocation of public money has long been recognized as one of the key conditions for a healthy dialogue between the citizens and their political leaders.

Participation Of Women In The Workforce

As a rule of thumb, countries with a large population of working women in highly skilled jobs tend to translate into a higher level of economic development. Many studies have demonstrated that women tend to spend more of their income on child education, family health and well being.  With an aging population, making the most of its human capital is a must for most nations. Most countries are now faced with the challenge of funding the increasing expenditures of health and state pension with less and less income received from taxes charged on personal income.

The above list of KPI’s is not usually included in the GDP of a nation.  They are mainly qualitative in nature.  Intangible KPI’s are as important as traditional economic indicators such as GDP growth, the level of unemployment, etc. They provide a more complete picture of a country’s economic resilience.

Humans are inherently social. We all have the “need for love and belongingness” (Maslow’s Hierarchy of Needs). Our psychological need for a sense of belonging can create an obsession with being part of a specific community, tribe or association. A lot of people believe that bigger is the size of the group to which they belong, the more invincible they are. Also, being part of a growing community can be perceived as a sense of achievement.  Our motivation can be driven by many other reasons such as career advancement opportunities or of better social standing.

Being part of a group always require compromises and sometimes even sacrifices when the need to fit in is more important that the right to speak out and be true to our core values. Steep hierarchies in certain organisations or communities has one major inconvenience: not knowing what is going on – making them counterproductive. The high stress of deep hierarchies makes it harder to think but also riskier to dissent. Dissenters are condemned to languish further down the pecking order.

As a result, being true to oneself can become the exception rather than the rule. If you are in a constant state of stress due to the many compromises to be made as being part of a group, it taxes your whole stress response mechanisms. A human’s stress response is generally meant for ad hoc use. Making an abusive use of it can lead to depression or mood disorders. Chronic stress also hampers our ability to think and solve problems.

Rank, status and their associated symbols are constantly evolving so that seeking them can feel like being stuck on the treadmill for ever. Pursuing them can become addictive, driving people to greater and greater extremes, bigger and bigger risks. The rewards are all relative as there will always be someone who has done better, won more, achieved more. Satisfaction can remain elusive for those people with that state of mind. Status has always been, is always and will always be relative….

Dissension is necessary for any organisation or community as it fosters new ideas leading to creative solutions for existing challenges. Choosing to communicate without status and without authority reduces distance so that sharing gets easier and dissolves social barriers. Sharing, trust and the desire to connect is what makes it worthwhile to be human. Size is not what matters.

It has been proved that mutual trust, reciprocity and having shared norms make a society resilient in times of stress. Communities with higher levels of social capital tend to have lower poverty rates, fewer incidents of violent crime, and stronger democratic institutions.

Social barriers are usually inherited rather than learnt. For the growing brain of a child, the social world supplies the most important experiences influencing his or her perceptions about life. For the first six years of a child’s life, every experience is directly downloaded into the subconscious without discrimination.  Parents also have an overwhelming influence on the mental and physical attributes of the children they raise.  The fundamental behaviours, beliefs and attitudes we observe in our parents becomes part of us.

Fortunately, we can choose to perceive the environment in different ways. While we cannot readily change our DNA, we can change our minds on how we perceive our reality. The function of the mind is to create coherence between our beliefs and the reality we experience. Behavioural epigenetics has demonstrated that the character of our lives is determined not by our genes but by our responses to the environmental signals that propel life.  Changes in beliefs lead to rapid changes in gene activity. When people raise their level of optimism and deepen their social connection, they are happier and they are more successful in their studies and career. Scientific studies of longevity, medical and mental health, happiness and even wisdom point to supportive relationships as the most important determinant. The creation of loving bonds assures the mind that we are safe.

So, whether we choose to be free in how we perceive our world or observing our lives through the lens of social barriers is up to us. In other words, we have the ability to edit the data we enter into our biocomputers, just as surely as we can choose to be part of a group and be ourselves at the same time.

Climate change affects every living soul. Given that the air we breathe as well as sunlight are all free, their use was meant for the benefit of everyone irrespective of social class, nationalities, religion and geographical location.  However, the actions of a few are now harming the health of the current living generations and the future of many generations.

In various parts of the world, economic development has mainly been accompanied by traffic congestion, noise and air pollution. Our cities have become mega cities as economic prosperity have attracted a continuous flow of new residents. The existing infrastructure such as housing, sanitation and public health services are inadequate to cater for the increase in demand.

The public resources of most developed countries have been completely stretched. There seems to be no sustainable solution unless a long-term strategy is adopted in regards to the mobility of people. Increasing mobility of people has also led to diseases being transmitted more easily. Ebola in the Democratic Republic of Congo is an example of how any disease can become a serious threat to its neighbours. Illegal immigration, terrorism and diseases are the modern plagues of today’s world.

When globalisation took place, not all countries were at the same stage of economic development. A few, mainly the advanced industrial countries, had well developed markets with goods to export and resources to protect their local economies in hard times such as unemployment insurance and welfare programs. Their industries grew in times when protectionist barriers were in place. In other words, the developed markets were, therefore, in a strong position to fully benefit from free trade, contrary to their counterparts in the developing world.

It is true to say that the responsibility of getting as much value as possible from its resources resides with a nation – the principles of sovereignty. However, most developing nations had nothing to sell abroad in the early decades of globalisation due to the complexity of their challenges. Most developing countries have a weak national identity making them vulnerable to civil wars, dictatorships and coups d’état. Historically, they were never prepared to be called a nation.

The African continent, for example, were essentially populated by tribes of various ethnic groups prior to colonialism. Tribes who used to live together were separated due to the emergence of man made national borders, drawn by former colonial powers. The Bambara people, for instance, are native to West Africa and have since then been now split into different countries: Southern Mali, Senegal, Burkina Faso and Guinea.

The “new” citizens of those ex colonies had to learn to live differently from what they have been used to for decades.  Their learning curve was arduous. Unfortunately, the economic and financial assistance they received was, most of the time, inappropriate. Each country differs in its history, culture and circumstances so that it is difficult to apply the same principles of development to obtain the expected result of economic growth.

In addition, the international institutions whose role is to help those nations in difficulties had their own internal challenges. For a long time, IMF’s recommendations were, most of the time, met with scepticism as the institution did not have the required public credibility.  Governance issues and lack of transparency were also part of the challenges faced by IMF. Though IMF consists of 189 member countries, its Managing Director is appointed by the EU with the support of the US. The decision making at the IMF is meant to reflect the relative positions of its members states on the global economy. For many years, it was not the case.

It is unfortunate that little weight is given to the voices and concerns of the developing countries though their natural and human resources have been and are still essential for the economic development of the advanced industrial countries.

Our global environmental and social issues are not going to be resolved easily if there is not a serious political commitment from our part. We all hear lectures about the urgent need for a strong governance, for preserving our living space, for promoting social cohesion but a number of us are inspired by what our governments or international institutions are actually doing…..

Political commitment does drive desired changes. The Kimberly Process Certification Scheme is the result of a United Nations resolution about eradicating the trade in conflict or blood diamonds.  With continued commitment of a number of countries, trade in blood diamonds have now been reduced to a certain extent. The most important outcome of the UN resolution has been worldwide public awareness that certain economic activities are sometimes meant for funding unethical activities or are operated using illegal means such as child labour.

This UN initiative as well as others such as the FLEGT by the EU have also reinforced the belief that civil society can influence economic development. In encouraging people to make ethical and conscious choices as to their way of living, we can contribute to bring about desired changes. NGO’s and social enterprises are increasingly becoming a means for civil society to take a more proactive role. Some of them are well known success stories such as Barefoot solar engineers, Grameen Bank and Beauval Nature

Positive transformational changes have been made possible by involving the communities in decision making. It is a means to empower them to take responsibility for their future and that of future generations. According to World Bank studies, community based projects leads to a higher likelihood of success. What makes them successful is that they come out of the communities they service and address the needs of the people in those communities.

NGO’s and social enterprises – the Third World sector as they are known, have proved that values based economic activities are resilient and can thrive despite the odds.  Many of them have evolved into professionalised entities with their own board and management team. The road has not always been smooth for some of them, having to resolve governance and funding issues. Fortunately, their future seems brighter as they have learnt from their past mistakes. They may become a source of inspiration for a comprehensive approach to economic development. Time will tell

In today’s world economy, most nations have suffered the impact of global instability. The current trade talks between the US and China are having negative ripple effects on the rest of the world. Embargoes on some countries and social instability in others have triggered a sense of vulnerability amongst multinationals as their revenue model is being threatened.  When the global players get sick, the world suffers from the potential loss of jobs and tax revenues limiting economic growth in different parts of the world.

The World has come to realise that most nations are interdependent on each other. The survival of one country depends, to a large extent, on the “Rest of the World”, including those nations that they may not trust or with which they have no strategic interest…. To put it simply: as growth slows down in the developed markets such as China, US, EU, they will buy less from those export driven economies which make up most middle income and low income countries.

Globalisation has also shattered one main economic concept: economic development is measured essentially by an increase in GDP. An increase in income does not always translate into better living standards. Health, measured mainly by life expectancy and infant mortality, is also an important determinant of the living standards of a nation.

Maslow’s hierarchy of needs explains that no one can grow and fulfil their potential if they are not well fed, do not have proper accommodation and have no sense of belonging to the community where they live. Alienation, low self esteem, loneliness all contribute to encouraging someone resorting to violence as a means to express their frustration against society as a whole.

To achieve sustainable economic success on a national level requires that the basic needs of the population is met. Only then can the country aspire to long term social and political stability. In other words, both high levels of employment and limited inequality are the prerequisites of the long term continued economic development of a country.

One of the most important resource of any nation is its people and if a large proportion of its population do not live up to their potential – the country will not live up to its potential. High levels of inequality, especially as a result of unemployment, can result in social unrest; crime is likely to increase, creating a climate that is unattractive to businesses.

The whole purpose of creating economic development has always been about transforming the lives of people, not just transforming economies. Policies for education or employment need to promote growth. It is also critical to understand how they affect individuals directly. Education is meant to open up the mind to the notion that change is possible. Great education teaches the basic elements of analytic reasoning and enhances the capability to learn. Education is important but if there are no jobs for those who are educated, there will not be development.

It is the role of any government to create a climate that allows businesses to thrive and create jobs. The economic, legal, social and political environment of a country is to be constantly revisited as society evolves and technology continues to make advances into improving our capability to handle the complexity of today’s economy. Information is always imperfect and markets are always incomplete. A mix of government intervention and “laissez faire” is fundamental for any country to thrive economically.

According to Ruchir Sharma, a long term observer of a nation’s economic success, a good understanding of economic reforms is a necessary ingredient for those who are at the helm of the economy.  No nation can ever hope again to grow as a free rider on the waves of a global economic boom as so many had been able to in the 1980’s and 1990’s. They will have to learn to row vigorously well if there is no wind….

Many nations often hope that their alliance with other countries will boost foreign investments and create jobs. Foreign investors are not only a source of additional tax revenue or the credible proof of a nation’s competitive advantage. They can become the vehicles for the transfer of technology or know how to train the local workforce.

Petronas, Malaysia’s oil and gas company, became one of the nation’s flagship thanks to the pro active stand that the government took in ensuring that the proper training was given to the local management team. If a nation was left to grow organically with no clear directives from its government, there will be too much of some things such as pollution and too little of others such as research and a well educated workforce.

Another example of great economic vision is Bengalore – India’s capital of information technology. The Indian government founded the Indian Institute of Science in 1909 and has since then continued to invest heavily in education and research which eventually paid off today.  Such long-term vision and determination from governments are rarely observed, unfortunately for us….

But multinationals have now become savvier in assessing potential investments overseas. They look at many factors including how well money is channelled into productive investment. A commitment to build and strengthen the productive investment of a country directly encourages the emergence of a strong entrepreneurial spirit generating stronger SME’s leading to more domestic jobs creation. Relatively high levels of corruption and government favouritism, if not seriously addressed, can cause social unrest as it has been the case for those nations involved in the Arab spring in late 2010. The aftermath of the Arab Spring is still painful and not fully resolved.

Development is a process that involves every aspect of society: engaging the efforts of everyone: markets, governments, NGO’s, cooperatives, not for profit institutions. Various World Bank studies have highlighted the importance of community involvement, finding that local participation in the choice and design of projects leads to a higher likelihood of success. Community involvement ensures that money is spent in creating the projects rather than in corruption.

Changing a nation’s economic pillars of growth is always tricky. Managing change becomes even more complicated with the existence of special interest groups. Those special interests often lose sight of the big picture, confusing their interests with the national interests of the country. Restructuring the economy inevitably implies loss of jobs. Most of the time, those who lose their jobs do not move on to better alternatives. They end up onto the unemployment roll and increased insecurity is the direct result.

This is why the role of trade unions is as important as a thriving business community. One cannot survive without the other. However, finding the right balance (as always!) is critical. Strong wage growth is as important as jobs creation for the whole workforce. The high level of unemployment in South Africa has been partly the result of the South African union movement (COSATU) focusing solely on strong wage growth for its own members whilst neglecting the fate of the rest of the South African working force.

To conclude, past economic history suggests that economic development is like a game of snakes and ladders, according to Ruchir Sharma. There are fewer ladders than snakes, which means that it’s much easier to fall than to climb. So, once at the top, a nation has to continuously strive hard to maintain its top ranking by investing heavily in research and development and working painstakingly to contain the kind of income inequality that can produce popular resistance to rapid growth.