By Ikechukwu Eze
Wednesday, July 21, 2004 and Friday, July 23, 2004

Former Deputy Prime Minister and Minister of Finance of Poland, Professor Grzegorz Kolodko was last Friday, a guest of the Nigeria Institute of International Afffairs (NIIA) where he delivered a lecture entitled: "Globalization and Catching-up in Emerging Market Economies". A professor of Economics who enjoys world reputation as a globalisation expert, Kolodko is also the director of TIGER-Transformation, Integration and Globalization Economic Research - at the Leon Kozminski Academy of Entrepreneurship and Management (WSPIZ) in Warsaw, and John C. Evans Scholar in European Studies at the University of Rochester, New York. His intimidating credentials also include playing a vital role in Poland's entry into both the European Union and OECD and writing 30 books and about 300 articles and research papers, published in translation in 23 languages.

No wonder his lecture which dwelt on developing nations' strategies for fast growth in a globalised market attracted the likes of Professor Pat Utomi, Dr Ndi Okereke-Onyiuke and Prefessor Osita Eze, Director, Democracy and Development Studies in Abuja.

In this interview with newsmen just before the lecture, Professor Kolodko throws more light on the challenges before Nigeria and other developing nations in the bid to close the development gaps between them and the rich countries in this era of common world market.

What is your stand on globalisation and do you think that the trend is good for the third world, especially African nations?

Globalisation implies that there is growing liberalisation which is followed by integration of the markets for capital, for goods, technology and labour. With such a definition I would say that for most of the countries globalisation brings about additional new chances and opportunities. There are new trends, risks, new opportunities, and possibilities. There is the need for every nation's leaders, intellectuals, businessmen to take advantage of the chances or to be exposed to risks. But I would say that there are some countries that are in a better position to reap from globalisation because of the legacy from the past, because of the culture component and because of the geo-political position. So from this perspective, Nigeria is in a better position than say, Chad. Or Poland is in a better position than say Moldova which is a tiny east European country... so in the case of Nigeria and Poland- and I am saying this not because I am in Nigeria now and I am from Poland - I am positive that the countries stand to reap from new additional chances provided by globalisation.

Those are opportunities to trade much more, to attract more foreign capital, take advantage of new technologies, and new managerial skills. So the balance is positive. But it is true that you are also exposed to risks. So when we pay more for our participation in the global economic game, I am not blaming the foreign global companies or international financial organisations or the government of other countries. I would rather blame my own people, our bureaucracy, our political leaders, our business people who lack the managerial skills and our policy makers whose policies are not working. There is always a tendency worldwide when there are problems to blame responsibility on something else instead of blaming it on the weakness of the domestic political scene or weakness of the institutions or whatever. They always blame God, or Americans or Germans or the world bank, or the IMF.

Are you saying that the developing world's hostility towards globalisation is misplaced. Are they not right when they raise the issue of imbalance in the development index which determines a nations performance in the global market?

Well, I am not naive and I know that a lot of people have made the point that the rich countries are gaining more from globalisation. The rich countries always say that they are very much concerned about inequality, poverty all over the world, but whether they are actually fighting those global ills is another thing.

But I am saying that majority of the countries that have embraced globalisation, including developing nations enjoy more additional chances for growth than attached costs. How good is the game depends on the quality of the institutions, quality of strategy for development, quality of political leadership at a given time. So even if one has a favourable geopolitical position like Czech Republic or Poland or Hungary or Nigeria or Mexico in America or Indonesia in South east Asia, if there are weak institutions, or lousy policies, lack of interest in investing in infrastructure, in human capital in education, there is no way globalisation will succeed. But I am very much critical as far as the attitude of the G-7 nations and the international organisations is concerned, towards addressing global issues especially as the international monetary fund policy has failed very many times in some places including some African countries and former communist countries of the eastern Europe and former Soviet Union at least at the early stages of transition.

Their attitude towards our opening up, liberalisation, privatisation, structural adjustment sometimes are ill-advised.

As far as Washington is concerned every country has to privatise and liberalise as much as possible. So this concept hardly work in any emerging market as it were. It may work if supported by proper domestic policies and coordinated international efforts. These institutional arrangements which we have now - G-7, World bank, IMF, regional development banks, WTO - are hardly compatible with the challenge of the contemporary world. That is the legacy of post colonialism, it is the legacy of the iron contain, legacy of the east and West divide, or capitalism led by USA or socialism led by Soviet union. Actually I think that in forthcoming decades this institutional set up of the world economy has to be retailored.

What has been proved for instance during the recent WTO meeting in Cancun is that there is now better coordination within developing countries like Nigeria, India, Indonesia, Brazil. I think one has to pay very big attention to China. Whoever is neglecting China is not understanding what is going on in contemporary world and what is going on in world economy. China is now a force because of its great economy and large population which is about ten times the population of Nigeria... . Policy is about co-ordination and about compromise. Very many things have changed as far as co-ordination between developing countries is concerned. And this is what is necessary; to coordinate better and have a common agenda to create some contact point with the rich, countries of the world. Just like what we had recently at the African summit I think it is a good thing because it is a message to the European union, to North America, to Japan, China to everybody that the guys in this part of the world are capable of sitting down together to agree on what their priorities are.

Is it possible for developing nations to 'catch up' with the richer countries economically as some advocates of globalisation would say?

One of my books which I brought here is called 'Globalisation and Catching up in Transition Economies'. I am a great fan of the catching up process and I think that if the development attitude is well tailored, there are many countries which have the historical chance to catch up especially because of globalisation. That is opening up, liberalisation and integration with the world economy. I wouldn't say that it as an option for everybody. And what does catching up mean? Catching up implies that there are countries that have been given the chance to grow and expand much faster than they were before or even faster than the rate of growth in the rich countries on the average.

In Poland we believe that just because of integration with the rest of Europe our catching up process will be quicker. We can look at the experience of Greece and Ireland. Ireland did catch up with Britain and they now have a higher GDP than Britain. Thirty years ago this sounded like a joke. But Greece is not catching up since they joined the EU. And you ask yourself why. I think what makes the difference is the strategy for development. I think that if we discuss the matter, even in 25 years definitely you will not catch up with the developed world. So many countries will be catching up in the sense that they will be growing much faster than the rich countries. The gap will not be closed, at least not in our life time.

It seems that even as the rich countries favour globalisation more than the developing ones, there seem to be a conflict in the sense that the Western world is growing weary of the trend of rapid growth in some countries. For instance, the Americans seem not to be comfortable any more with the growth of IT industry in India. What does that portend for globalisation?

The example you have given is just a good one to demonstrate that developing nations are capable of taking good advantage of globalisation, liberalisation and integration of the world economy. The development of the IT industry on Banglore is very good for India. It shows that capital acts in such a way that it moves to where there is comparative advantage and that is India. It may happen also in Nigeria assuming there is good regulation and good quality of human capital. It wouldn't happen in Poland.

Why?

Because of different language. Lingua franca as an important factor in contemporary global economy, whether you like it or not, is English. And that gives you a tremendous advantage over countries which are not English speaking. If India was not English speaking and if the software experts were not proficient in the language, the Americans wouldn't have been interested in the Indian market. I think that we have to continue with liberalisation but always there is a regulation.

Even the most liberal zealots, also learn at the end of the day that free market economy is about regulation. Free market economy does not mean that everything is allowed and everybody does whatever he wants. This is chaos, this is anarchy, that will lead to economic catastrophe. So what we are actually looking for is a kind of re-regulation. But there is a risk there again because having said so, we are giving a great deal of power to our policy makers and to our legislature on how to regulate our economic activity, especially when they are the difficult type. There is a temptation to over-regulate. But the truth is that there are things you have to put under control and there are things you have to let go. Free trade is good for a developing country if it is free. If it is free in the sense that everybody can sell whatever they want from coke to digital recorders, mobile phones, cars. When I was jogging this morning ( last Friday) I saw that you have India made Tata trucks here. But you have difficulty in access of your products to the global market. And that is the hypocrisy when we say let us open our markets and then you are opening and I am not opening my own market. This is a slur in global relations and we have to work it out.

What can be done to improve Polish-Nigeria relations which seemed to have been better before the collapse of communism?

I am afraid you are right that relations were better once upon a time. They were better with some African countries than they were with others. This was because of the prevailing global trend at the time. We did have regimes that were more socialist oriented that had their own approach. And there were certain industries like ship building, fisheries, food processing which were targeting the market here but they were mainly government driven. But now we rely much more on the private sector.

The question is what to do to encourage the private sector or the business circle to be more active or get more actively in touch. In the case of some countries including Nigeria, for the kind of expectations for improvement to take shape, certain things may have to be clarified. Such things as regulations, institutions, infrastructure, policy making, transparency, etc. Some companies may be reluctant to go to Nigeria because it is considered - rightly or wrongly - to be too risky. And for the investor who has his eye on returns, he may prefer to go to Mexico instead of Nigeria or to South Asia instead of Africa.

But I think there is also some ideological component in this. After the collapse of socialism recently there emerged pro-Western bias. So everybody is looking towards the west. It has become even more so after we joined the European union. But even then we can still do business with Nigeria in such areas as maritime, ship building, fisheries, food processing.