During his visit to Nassau Institute in June 2007, James Shikwati, Director Inter Region Economic Network was interviewed by Jeffrey Lloyd of Radio Station ‘More FM’ in Nassau – Bahamas. The one and a half hour interview conducted on June 20, 2007, focused on economic issues. Below are some of the excerpts:
Jeffery: How did you get your training as well as become a libertarian Economist?
Shikwati: I am a graduate of University of Nairobi based in Kenya. I was originally trained to be a teacher. While teaching in high school for six years, a question always nagged my mind about why Africa is where it is in terms of development. I researched on the role of an individual in changing a society and contributing to a country’s economic growth. Discovering that economic growth is a sum total of individual action, I decided to seek the best action that can make individuals recognize they have a role to play in improving the African situation. I left teaching in 2001 and set up a think tank known as IREN. It’s now getting top economists who see the role of individuals as key to contributing to economic development. We look for ways to empower such people and work with the government to shun policies that make it difficult for individuals to reach their maximum potential.
Jeffery: What do you mean by the African situation?
Shikwati: People think of Africa, in terms of poverty. Africa’s image is portrayed in terms of famine. It is true we have hungry people but we also have people who are struggling to see that Africans are fed. Not all the 950 million Africans are facing hunger. What has not been maximized is productivity.
Jeffery: Africa is similar to the Caribbean in many respects. While we do not receive money from the US, we receive aid in kind through amenities, and other facilities. Our economies directly tie to that of the US. For example, a majority of our tourists come from the US and most of our economic development comes from direct foreign investments. Are you seeking to wean
Shikwati: Exactly. That’s what I am doing.
Jeffery: Is that possible?
Shikwati: Yes, it is 100 percent possible. Countries need to assess the kind of resources and wealth they have. When you talk about foreign direct investment, it means that the foreign company comes after seeing something of value. It does not just come on charity grounds. Foreign companies see a potential in your country. Unless Africans tap into their abundant resources and sell them, somebody else will always come, tap them and give Africa aid. This creates a beggar mentality in Africa while in essence we need to look for ways to exploit the resources we have to the benefit of our continent and the world. Aid erases the mentality to own businesses and compete at international levels. I think the same can be said for Caribbean countries.
Jeffery: Are you saying that there’s no other reason why a foreign investor is in the Bahamas except to make money?
Shikwati: The bottom line is making money. Why then shouldn’t the Bahamian also have a store? Nobody said they can’t own one! The person who wants to come in and make money should be allowed to do just that and also let the Bahamian make a store which could be used in other countries as well.
Jeffery: Have we been inculcated with a beggar mentality?
Shikwati: Actually, the point starts with confidence. If somebody destroys your confidence, even your business will be affected because the whole assumption would be that somebody should offer the solution. The confidence of Africa's descendants was ‘bombed’. We are in a century where we need to rebuild it. We are just like anyone else in the world. We need not fear!
Jeffery: Cuba, through the leadership of Fidel Castro and his people, attempted to develop confidence, talents and efficiency of their people for the benefit of Cuba and the rest of the world. Today, they are crying that the US doesn’t trade with them, that the US is using its economic muscle to make it difficult for other countries to trade with Cuba thereby causing starvation and deprivation. I presume you are not talking about an exclusion of assistance and aid, but are looking at striking a balance, that is, learn how to develop while at the same time seek the assistance of others. Is that true?
Shikwati: I am for competition. If you enclose and exclude others, you might be doing something thinking that it’s the best while in essence it may not work, put in the global market. When I urge individuals to exploit resources and do business like any other person in the world, I am advocating for competition (knowing our background) that we have a confidence problem.
Cuba serves as a very good example to anybody in Africa and the Caribbean to understand exactly how the global market works. It offers a very important lesson that in competition, some people may use their muscle to inhibit fair competition. In Africa, the Chinese are a real issue because they are almost taking over Africa. Africa’s old friends, the Europeans, are worried. There’s therefore a huge competition between Europe and China to make sure that they retain their foothold in Africa. If Africans do not exploit the confidence building aspect, they might be the end losers in the competition.
Jeffery: Are you concerned about the new imperialism? The world tried to rid itself of imperialism in the last century. People are now beginning to fear that China may now be stretching its economic muscle. In the Bahamas, we have received 30 million dollars from China, to build a stadium. I know that they are in Cuba and now you tell me Africa. Are you as an economist afraid?
Shikwati: I am not afraid, I believe in the power of market economics.
Jeffery: But we don’t have the confidence. It has been assaulted!
Shikwati: That is why we have think tanks like IREN and Nassau Institute to build that confidence, so that when the Chinese and others come, the think tanks will address what we can learn from them. Britain was once dominated by the Romans. The British learnt something, perfected it and conquered the world. We need to learn something from the Chinese, Europeans, and Americans.
Jeffrey: Who becomes the change agent? Should the government begin to implement policies geared towards this new realization or should it be a think tank, small group, or even a citizen movement?
Shikwati: I go for a think tank to work in collaboration with the policy maker and the Bahamian people because think tanks do not involve emotions in addressing issues. Emotions should be the last thing to bring to the table. There has to be a lot of thinking. Countries have think tanks that advise them. A lot of thinking, scientific backing and statistical measurement have to be put in place. The change agent will be the Bahamian people, once they are exposed to facts. The US for example, has many think tanks that feed it with information before it comes to Bahamas; it already knows what it will get out of Bahamas.