Why we have to be globally competitive (Part 1)
| Friday October 25, 2013 16:40
The report remains the most comprehensive assessment of national competitiveness worldwide. I am a faithful reader of the GCR due the increased level of globalisation over the past decade, which means that for us to prosper we have to be able to compete favourably for opportunities in the international stage. Naturally people including us Batswana tend to be very good when it comes to individual and company competitiveness.
We go to great lengths to position our careers and companies in a manner that gives us competitive advantage when it comes to individual and company competitiveness.
But when it comes to country competitiveness – something that should be the collective responsibility of all of us, we grapple as we have the mind-set that country competitiveness is purely the responsibility of government.
My passion for global competitiveness is mainly driving by my strongly held view that if our country is a success, so will be our companies and ultimately the individuals in Botswana.
I believe that reports like GCR should stimulate public discourse because they make us understand the key factors that enable job creating economic growth and help to explain why almost all barometers of competitiveness always rank countries such as Singapore, Switzerland and Sweden as top performers when it comes to raising income levels and providing opportunities for their respective inhabitants.
To determine global competitiveness the WEF uses 12 pillars to calculate the Global Competitiveness Index (GCI). The 12 pillars are categorised into three sub-indexes namely l basic requirements (includes four pillars – institutions, infrastructure, macroeconomic environment and health care & primary education), l Efficiency Enhancers (consists of six pillars being higher education & training, goods market efficiency, labour market efficiency, financial market development, technological readiness and market size), l innovation and sophistication indicators (consist of two pillars – business sophistication and innovation). In this year’s WEF GCI, Botswana is ranked 74th out 148 nations. This is an improvement from last year as we move up five places.
Our improved ranking is largely due to our good performance in the pillar of macroeconomic environment in which we are ranked an impressive 24th. This is actually the second best ranking in African economies (after Gabon) and top ranking in SADC region. In the basic requirements sub-index we are doing badly in the pillars of infrastructure and healthcare & primary education. We are ranked 94th and 115th respectively. These are some of the pillars we need to work on to significantly improve our global competitiveness.
In my view Infrastructure is an overarching pillar because to do well in other pillars and hence improve our GCI, we need sound and efficient infrastructure. For instance the quality of our education systems and access to healthcare depends on infrastructure. Innovation requires research and development which is enhanced by internet connectivity.
To link goods and market you need good communication links, efficient road, rail and air transport systems. Infrastructure generally enables an economy. So having good infrastructure really helps and to achieve this we need increased collaboration between the government and the Private Sector.
In 2010 South Africa was invited into the Brazil, Russian, India, China (BRIC) bloc. In my view the inclusion of South Africa in this grouping is more a strategic move than anything else.
BRIC economies knew that by wooing South Africa and establishing BRICS they would have a platform through which to access the SADC region and African markets, with about 230 million and 1 billion people respectively. Considering the combined population of BRIC economies and Africa which accounts for circa 56% of the world’s population, there is no doubt that in the near future global economic growth will be driven by what is referred to as emerging and frontier markets (China, India, Africa and Latin America).
The fact that Africa is considered one of the last economic frontiers and the inclusion of a SADC member state (South Africa) into the elite BRIC group presents a good opportunity for Botswana to step up and become a conduit and regional hub for investment into Africa. We need to be able to position our country in a way that as growth occurs in the SADC region and Africa, multinational companies should be able to consider Botswana as a country where they can set up regional headquarters and a place where they can do business in. Can we be a regional hub for investment into Africa? Without a doubt we have the potential to achieve that.
As the WEF GCR attest, we have a very sound macroeconomic environment, reliable & transparent institutions, efficient government spending as well as a fairly developed financial market. We are also well-regarded when it comes to labour market efficiency (ranked 47th globally against this pillar) which means we are a country with a flexible labour market and able to retain and attract talent. Our Government has also successfully managed to negotiate the relocation of diamond sales from London to Gaborone – very commendable move.
This means our capital city will soon be a hub of world-wide diamond trading with £3.7bn (circa P51bn) diamond trades happening in Gaborone annually. One of the things that will inhibit our country to be a contender for regional hub for investment into SADC region and Africa is infrastructure. Although when compared to other African countries the quality of our infrastructure is good, there is need to ensure we compare favourably against the best in class when it comes to infrastructure development. Globally competitive infrastructure will be Botswana’s clear statement of intent to be a significant player in emerging and frontier markets.
We need globally competitive infrastructure to optimise the opportunities of relocating diamond sales from London to Gaborone as well as using our proximity to a member of the elite BRICS bloc to position our country as regional hub for investment into Africa.
I read on the Ministry of Transport & Communication website about the Transport Hub policies and projects. The Transport Hub is another commendable government Initiative. There is no doubt that once completed, projects to be delivered through the hub like the rail line linking Botswana and Mozambique, Dry Port in Namibia and Kazungula Bridge over Zambezi River will go a long way in improving our global competitiveness and opening our country to lucrative regional and international markets including Asia and Latin America.
But the successful delivery of massive infrastructure projects such as those listed in the transport hub require best practice procurement strategies underpinned by robust business justification processes, value for money analysis, tried & tested project control systems, collaboration throughout the supply chain to unlock innovation as well as diversified infrastructure funding models.
As an experienced built environment professional, I believe that I am well placed to influence debate on the best strategies for infrastructure development. As such in my next article to be titled “Global Competitiveness Part 2 - How to develop our Infrastructure”, I will put forward a compelling case on an infrastructure development strategy that will ensure efficient and sustainable construction output that will bring our infrastructure to competitive levels.
*Batho Mohwasa is a Chartered Quantity Surveyor with Mott MacDonald and writes in his personal capacity.