In Malawi we have often under paid laborers and under-valued the raw material. Even on export the outcome of that product is a very little contribution to the GDP. No wonder the GDP of most African Countries is very low. For they are raw material producers and they are betraying themselves by under-valuing labor and raw materials.
I would advise before thinking about exporting an expensive valuable product think about the end of that product in the case it is not found to be valuable by the end buyer.
It comes to a point of producing what we ourselves really need.
In the case of Tomato Processor: Most Malawians use fresh tomato and not preserved one. If external market fails we have effectively reduced supply at country level and wasted it as it is not as valuable at country level. Because we would rather have the fresh product but what is available is a processed product, we have effectively devalued the product but increased its price.
The GDP per capita which seem to be calculated from the GDP itself is really faulty than starting with the distribution of the per capita income across the population. If this distribution is normal and not highly skewed towards the fewer rich population it is an indication that things are good. And then calculation the total GDP from the per capita.
While the GDP can indicate the overall income its reality on the ground might not be rosy. For example:
1. A region might have a high GDP but the product does not benefit its population rather exported and in the end the population suffers from lack of basic needs (Obviously not our goal).
2. A region might have high GDP but the economic machinery might not allow the majority of the population to benefit(rich getting richer, the poor remaining poor)
(By its commission, the government which drives the direction of the economy for the benefit of its citizen, should not want this).
3. A rise in GDP can also be an indication that the value of a product at raw material level has been increased. (So effectively Malawi's GDP will rise highly if the laborer and the raw material are not under-valued).
We might price ourselves highly, but nobody can buy us. This, in the end, is what reduces our value. Therefore I see it very important to put our valued labor to what we really want. While mining can increase our national income on exports, it destroys the land, which we live in and benefit from, in such a way that we might have to start importing basic needs as well. While the $500million/ billion from uranium we get seems to be a lot, it might not even be one hundredth of the real value and much more worse the pollution stays on our land the profit in another land. If every thing has to have trade offs for optimal benefit, this is the reason why Kamuzu might not have exploited mining and concentrated on agriculture. And effectively the reason why we still have a lot of minerals.
Muluzi's government drilled a lot of boleholes receded the water table and there was no rain. (Just an economic policy, huh?).
Bingu's government added just a tit bit of fertilizer to the rain. What a harvest.
Does Bingu's government destroy this same land by an economic policy? Tread carefully.
Malawi(Africa) is not poor and its riches are not dependent on what others value but on what we ourselves value. There have been tales, stories, or why the white men kill themselves and others over stones which they don't eat(africans wondering).
Where is our value? If we put our energy where our value is needed we will have the income we really deserve.
Share this where it might benefit before we destroy so much with inverted ideologies.
Sent from my BlackBerry smartphone