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Eddie Cross: The only certainty is that nothing stays the same

When I think back to how much the world has changed since I was born, the nature and scope of the change is difficult to comprehend. Certainly, when I was much younger I could have never forecast the changes that have occurred.

Growing up, we had the Federation of Rhodesia and Nyasaland, the legacy of the Second World War, which wiped out a complete generation and changed the face of Europe.

We were in the ‘Sterling Zone’ and used the British pound sterling as our currency base, we held our reserves in London.

My father had never flown in an aeroplane, always travelled by train if he could. On the train we got coffee in bed and if we put our shoes out, they were cleaned and polished and returned.

My to be wife travelled 3000 kilometres by train from the Copper Belt in Zambia to the Eastern Cape to go to school. Life was very good, we lived in a large house with servants, went to school where every teacher had a University degree and we played sport with other ‘white’ schools.

Then came the ‘Wind of Change’ through Africa and one by one the colonial States came to independence. The Congo fell apart and many of my own friends and school mates, served as mercenaries in that civil war.

Eventually our turn came and we found ourselves in the armed forces, six weeks in the bush and six weeks in the office. Our ‘Low level Guerilla War’ started in 1964 and went on until 1980, we killed each other with enthusiasm in a pointless struggle to preserve our privileged way of life.

Independence in 1980 changed everything and changed nothing. The white population shrank from nearly 300 000 to 50 000 in five years, black faces replaced white ones, but the culture did not change that much.

In the Rhodesian era our Prime Ministers served for 37 and 17 years unchallenged, After Independence our first President served for 37 years.

In the field of technology, a whole raft of things we thought were essential to business life, have disappeared. Communications across the world have become universally available and inexpensive.

The cell phone has become and essential part of every day life with massive communication capacity at the touch of a button. My first IBM Computer was a monster, in an airconditioned room with 25 girls punching cards as entry data.

When we turned it on is shook the whole building it was in. Now you can buy the same capacity in a small box that can stand in the corner of your office.

I recently read the biography of Alan Greenspan who served as Chairman of the Fed in the USA for 17 years. I was fascinated to read how he feared that the digital revolution taking place in his country would reduce employment and productivity.

He argued that it would destabilise the whole country. He feared that the continuous increase in US Productivity that had underpinned the long term stability of the dollar would disappear.

In fact, he said neither happened – the digital revolution made labour more productive across the whole economy and job growth was higher than it had been for decades.

Even now job growth in the States is increasing rapidly so that they have nearly full employment and may need to allow higher level of inwards migration to meet demand.

Its not difficult to see how this happens – I know from my own experience that I am much more productive than I used to be as an executive. On the factory floor so many jobs are now assisted digitally, this has removed drudgery and is increasing productivity.

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These changes are making it possible to maintain living standards at a level that was impossible a hundred years ago. But the down side is that it is creating a more unequal world. The accumulation of wealth by a minority without the moral injunction to look after others, is very dangerous.

This new technical world is making development and growth in countries like my own that much more difficult and expensive. The productivity of factories in the advanced world is often many times of those in the developing world. We simply cannot compete.

The inequality of our world grows ever more seriously, not just between individuals but between countries, even continents. The same conditions in the 19th Century led to the colonisation of much of the less developed world.

It also led to the ruthless exploitation of less sophisticated peoples, by the newly industrialising States. India is the great example.

Elton Musk is completely wrong when he stated recently that Artificial Intelligence will eliminate work. All it will do is exacerbate the current crisis in global business by enabling the developed countries of the world to become more competitive and wealthier.

It simply widens the gap between the haves and the have nots, the rich and the poor.

Its not as if we do not have solutions to the management of change in this world of ours, we do.

After the Second World War when Japan and Europe had to pick themselves up after the global conflict that had wiped out their capacity to feed and shelter the people that were left alive, the West, led by a small group of amazing leaders, initiated the process that has created modern day Europe and Japan.

What did they do? They allowed these countries to select and appoint their own leadership. Then they made the core funds available to rebuild and created the Multilateral Agencies of the World Bank and the IMF and the WTO to help.

This was followed by a process of globalisation led by the United States. For the next 50 years, world trade grew by 15 per cent per annum, allowing the recovering economies of the East and Europe to grow.

Japan is now the third largest economy in the world, Germany its largest exporter and Europe the largest economic grouping in the world. We created that new reality, when Ireland joined the EU in 1975, it was poor and backward. Look at the transformation that has taken place since then.

What is not fully understood is that the USA has been largely responsible for the massive and rapid change in China. When Nixon and Bush opened up towards China post the death of Mau, it allowed the reformist leadership of China access to global financial resources and trade.

The West, after 150 years of industrialisation and growth had accumulated vast cash resources which could not be fully exploited in their economies.

Japan and Europe used these resources to rebuild, Japan debt is 250 per cent of its GDP. China followed their example, borrowing money in staggering quantities from the West and the USA in particular. Today China is the most indebted country in the world.

In addition, the West allowed Europe and Japan and then China to secure the technologies they needed. China has the largest foreign student population in the United Kingdom, many at their best Universities. I can remember Chinese delegations visiting my factories with cameras and note books.

The result, more than 1 billion Chinese have been elevated to middle class standards of living and China has a wealthy class that rivals their western counterparts. China has become the industrial capital of the globe.

Its products rival those of the West in every field. In a very real sense that is what has to happen in every neglected corner of the world.

That is why I think sanctions on poor countries are self-defeating actions. The USA operates sanctions against 60 countries, now talking of taking Sout Africa out of Agoa.

The main hope of bring about a more democratic world and eliminating poverty is very opposite of sanctions, its those actions that will create a middle class and higher incomes in poor countries. Coercion does not work, it never has.

Eddie Cross is an economist and former opposition Bulawayo South MP. He writes here in his personal capacity. You can follow his blog African Herd