Defining what we really mean by “development” is one of the central challenges for humanity in the 21st century. Look back fifty years and it all seemed easy. We had “first world countries”, and “third-world countries”. We had the stages of growth, and a belief that economic development and development itself were more or less synonomous.
Of course in the last half century times have changed. We now have a much more balanced view of development. The Human Development Index has brought to the fore the importance of non-economic indicators like literacy and life expectancy. The environmental movement has mainstreamed the significance of sustainability. And radical ideas like Bhutan’s Gross National Happiness have shown us that completely different ways of looking at development are possible.
As positive as these recent trends are, one fear I have is that the importance of economic development is quickly becoming underappreciated, especially in western “development studies” programs.
Nothing brought this home for me more vividly than, last month, when Malawi published projections for the income from this year’s tobacco harvest. Tobacco production is, by far, Malawi’s most important industry. It generates roughly 60% of export earnings – the foreign exchange from which, in turn, buoys the rest of the economy.
Tobacco is not just a big industry on paper, its very very noticeable here. In the central region, many smallholder farmers grow at least some tobacco, at times it feels it’s almost as common a sight in rural areas as maize. There are also huge tobacco estates scattered around the country, which employ hundreds of people each. And many better-off people, including a good number of my co-workers and friends, grow tobacco on a semi-commercial basis as a side business on family land. Come harvest season, tobacco is everywhere.
That’s why I was so shocked by what I read last month: national export earnings for tobacco this year were expected to be somewhere around $380 million. $380 million?!!?! From the country’s largest export industry? From the crop I see everywhere, being grown, dried, graded, baled, and loaded on to trucks? From the industry everyone talks about when they talk about Malawi’s economy? $380 million…
Reading this in the local paper was one of the first times I think I really realized what economic development means. Malawi’s leading industry, its source of 60% of export revenues, earned $380 million last year. That’s about on par with the United Kingdom’s 2009 earnings for the manufacturing of watches and clocks ($349 million). It’s lower than the UK’s 2009 export earnings from the manufacture of “corrugated paper and containers” ($435 million).
It’s less than the export earnings from the UK’s wine industry (I didn’t even know the UK had a wine industry), which came in at $504 million in 2009. It’s closest UK competitor seems to be the export earnings from the “quarrying of sand and clay” ($385 million), which is remarkable since sand and clay are low value, high weight products, which don’t generally lend themselves to export. And, of course, Malawi’s tobacco earnings pale in comparison to earnings from the UK’s ubiquitous and omnipresent “manufacture of tubes” industry, which brought $2,092 million in 2009.
All of this really puts into perspective for me the real challenge of economic development. Any economy which would generally be considered “developed”, like the UK’s, has dozens and dozens of obscure industries (seriously…UK wine?) which earn more annually than the flagship industry in Malawi. While Malawi’s economy rises and falls with annual tobacco earnings, people take little notice of the earnings from “manufacture of knitted and crocheted pullovers” ($654 million for the UK in 2009), “manufacture of toys and games” ($1,161 million) or any of the other diverse and unexpected industries that keep developed economies moving. And yet many of these industries absolutely dwarf Malawi’s tobacco crop in terms of export earnings.
Looking at this, I have to think that, while the pursuit of human development and quality of life should be the real goals of growth in Malawi, a lot of economic growth is also going to be needed to make these nobler goals possible. A lot. I knew that Malawi, like many developed countries, is dependent on one major export industry – I just didn’t realize how small that industry really was. I think that putting things into perspective can really help to appreciate the scale of the challenge, and maybe restore to the goal of economic development, e.g. the development of new industries and manufactures, a bit more well-deserved prominence in the greater development debate. Human development is important, but things like health and literacy won’t come freely – there needs to be a diverse and vibrant economy in place as well to support them. $380 million per year from your largest industry just isn’t going to cut it…
Note: All UK economic stats were taken from the UK Office for National Statistics online site. Of course I initially wanted to use Canadian export statistics, but Stats Canada saw fit to try to charge me $81 for the privilege. Transparency at its finest…