As we noted in the first part of this piece, Prof Eskor Toyo’s book, ‘Economics of Structural Adjustment’, published in 2002 is still of enduring relevance because the country’s current economic policies are still no different from the neo-liberal components of privatisation, currency devaluation, deregulation, removal of subsidies and restriction of the sphere of the state among others. He identifies three types of critiques of SAP. The first sees the programme as necessary but questions the extent to which some of its components have been carried out. The second associated with the Economic Commission for Africa (ECA) is essentially nationalist or post Keynesian and questions the design of SAP and some of its component policies. The third, which Eskor Toyo identifies with, offers a more fundamental critique of SAP as a set of policies designed by western financial institutions supported by neo-liberal western regimes to save capitalism as a global system.
The latter perspective raises questions about the desirability of capitalism as a system of economic management and its inherently limited capacity to promote positive human values such as “freedom, justice, the welfare of the majority, society’s unity, social stability, individual and collective security, social efficiency and progress”.
Of course, critics of Eskor Toyo’s ideological position will contend that the socialist states have collapsed and virtually all transformed into free market economies precisely because of the superiority of capitalism as a system of economic organization. Yet, the triumphalism in the West attendant on the collapse of communism has ebbed because of the persistent cyclical crises that continue to characterise capitalist economies throwing millions of people into unemployment, poverty and homelessness while increasing social inequality. But whether or not one agrees with Eskor Toyo’s ideological orientation, he raises certain critical questions which must certainly attract the attention and interest of the managers of a neo-colonial economy like Nigeria.
For instance, Eskor Toyo raises the key issue of the dichotomy between growth and development. He contends that the two cannot be conflated. The managers of Nigeria’s economy have continuously inundated us with the country’s impressive statistical growth rates which are not reflected either in massive creation of jobs, improvement in infrastructure or the overall well-being of the vast majority of Nigerians. He contends that development means a qualitative change for the better in the capacity of man to control his environment while growth, by contrast, means mere expansion of scale without necessarily any improvement in the environment.
Unlike members of our current economic management team who uncritically regurgitate International Monetary Fund (IMF) and World Bank ideas, Eskor Toyo argues that “It is the facile focus on GDP growth rate as such that enables the World Bank and the IMF to mislead. A country can, in fact, be developing while the growth in per capita income is zero”. He cites the example of a country that decides to save to build an iron and steel industry and train its own scientists and engineers to man it. Even if nothing changes in terms of per capita income during the gestation period of this project, he argues, “because of the crucial transformational role of the character of the investment, the country by that investment has made an incalculable leap in development”.
If I read him correctly, Eskor Toyo’s view is that it is the non-pursuit of policies that can promote an autochthonous industrial and technological base that has made it impossible for countries like Nigeria to transcend mere growth and achieve genuine, self-regenerating development. In this regard, he makes a crucial distinction between basic and non-basic industries arguing that the engine for any country’s transformational development are it’s indigenisation of the basic industries such as iron and steel, non-ferrous metallurgy, machinery, chemicals, fuel and power and construction material such as cement and glass among others.
“Each of these industries”, he argues, “produces an indispensable input into the processes of all or most other industries. They constitute the prime movers of industrialisation”. Consequently, a country’s capacity to develop in any meaningful sense will necessarily be a function of its “ability to build, expand and transform its own basic industries by its own skills”.
To illustrate his thesis, Eskor Toyo cites the example of South Korea and Brazil, two countries that have achieved a commendable level of ‘Dependent Growth’ largely through trade in manufactures. But he points out that the two countries can expand manufactures or increasingly export manufactured capital goods “because there has been built there an industrial base and on the basis of this there is developed a technological base”. In sharp contrast to this, he asserts that Nigeria cannot attain self-sustained growth through current policies that are geared towards expanding trade in light industrial manufactures rather than establishing a solid industrial and technological base for the country.
In the case of China and India, Eskor Toyo states that the secret behind the economic transformation of these countries is that in the 1950s and 1960s their leaders took the deliberate decision to force their countries’ pace of industrialization. This they did by paying primary attention to the basic industries as a basis for technological self-reliance, developing a local raw material base to avoid the huge debt overhang attendant on heavy importation as well as developing their industries primarily to serve their large internal markets.
Thus, contrary to neo-classical economic orthodoxy, he submits that “The rapid development of a complete self-reliant industrial base demands a thoughtful restriction of trade, foreign transnational investment and the mere assembly type plant”. He notes in this respect that while they were industrializing, countries like Japan, the Soviet Union and Eastern Europe practiced autarchy while Germany created a customs union to protect its infant industries. In its case, the United States “erected very high rates of tariff to protect her industries and adopted the Monroe doctrine to preserve the whole of the American sphere for herself”.
Again, contrary to the claim that the economic ‘miracle’ achieved by the so-called Asian Tigers were due to the adoption of neo-liberal policies, Eskor Toyo contends that the key distinguishing feature of the Newly Industrialising Countries including India, Pakistan, Mexico and Brazil “is that as a rule they decided to establish the basic industries as a foundation for all-round development”. Indeed, the High Performing Asian Economies are distinguished by their early decision to break out of the Import-Substitution-Industrialization net in which Nigeria is still trapped. They placed their emphasis rather on manufacturing for export.
It is against this background that Eskor Toyo trenchantly condemns the lack of seriousness with which the Nigerian ruling elite treat industrialisation and wonders “how a country that consumes so much foreign exchange on luxury imports or whose citizens keep large fugitive funds in foreign countries cannot find the operational or infrastructural capital for its basic industries”.
One of Prof Toyo’s fundamental disagreements with neo-liberal SAP policies is their assumption that a country like Nigeria can be extricated from poverty, depression and indebtedness without first taking the imperative step towards a real industrialization and modernisation of its industrial base. This is why, he contends, that despite the achievement of many of SAP’s objectives – a positive growth rate, improved capacity utilisation, increased local raw material sourcing, increase in non-oil exports, rescheduling of debts and lightening of the debt burden, increase in saving, more Naira in the hands of the Federal Government and attaining a ‘realistic’ exchange rate – Nigeria remains as dependent and underdeveloped as ever.
Some would consider Eskor Toyo’s vision and programme for a socialist Nigeria as impracticable and utopian. But then, let us recall the words of the late radical American Political Economist, Paul Baran, “Socialist Europe; there are moments when I ask myself whether it is not a utopia. But each idea not yet realised curiously resembles a utopia; one would never do anything if one thought that nothing is possible except that which already exists”.
