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Bench marking Germany (1)

By Obadiah Mailafia

FOR many years, Nigerians pointed to the East Asian city-state of Singapore as the ideal of the developmental state that was worthy of imitation. I always reminded my beloved compatriots that Singapore is too small for our world-historic ambitions. Others have looked to Malaysia, Brazil and UAE.  Of course, there is something to be said for those emerging economies.

But I am persuaded that if there is any one country against which we should benchmark ourselves, that country is Germany.

File: President Muhammadu Buhari walks past marksmen in traditional Bavarian dress as he arrives for a reception on the sidelines of a G7-summit in Munich, southern Germany, on June 7, 2015. AFP PHOTO

I am also keenly aware of the limits of mimesis. Every country has evolved as according to its own unique historical conditions, cultural attributes and national character. But I also believe that economic development is a learning process.

Countries, like individuals, can learn from one another. One of the mysteries of the human spirit is the capacity to learn and adapt. It is, in fact, a virtue. The civilisation of Pharaonic Egypt – by far the greatest in the ancient world – eventually atrophied and died because of failure to learn and adapt. The same is true of medieval China.

Let me put my cards on the table: I love Nigeria deeply and I desire that our country should become a first rate industrial-technological nation – a prosperous multi-ethnic democracy anchored on the rule of law, social justice, solidarity and peace. I am also a Germanophile. I admire Germany, the land of medieval troubadours – those Teutonic Argonauts who have demonstrated the highest excellence in the things of the mind.

I have visited Germany several times and remain enamoured of the cultural riches of Berlin, Bonn, Cologne, Frankfurt, and Munich — the land of Goethe and Schiller. Thinkers such as Immanuel Kant and Martin Heidegger represent the German genius at its best. Carl Friedrich Gauss embodied perhaps the highest mathematical genius of all time.

Germany invented quantum physics. The very idea of the modern research university is a German invention. At the turn of the 20th century, Germany was the epicentre of Western civilisation; with the University of Berlin having 50% of the world’s Nobel laureates in science and medicine.

It was my great good fortune to have been invited to dinner with parliamentarians at the august Bundestag (German Parliament) building in the autumn of 2011. I was also privileged to have been on a delegation that was received by former President Christian Wolff at the plush Bellevue Palace in the Berlin-Tiergarten.

My friends know me for my passion for classical music. The German composers are my favourite – Bach, Beethoven, Mozart and Handel. My favourite spiritual thinker is Dietrich Bonhoeffer, the young theologian martyred by the Nazis in 1945 age thirty-nine. I am a great admirer of German technology, industriousness, orderliness and uncompromising efficiency.

Nigeria and Germany have a few things in common: we both have rather chequered national histories; we both operate federal systems; we are both regional powers; and our peoples are reputed to be hard-working and industrious.

But there are profound differences. Nigeria has a population of 186 million against Germany’s 82 million.  Germany is the 4th richest country in the world, with a GDP of US$3.7 trillion and a per capita income of US$44,184. It has a high Human Development Index, HDI, of 0.926, with a moderate Gini Coefficient – a measure of inequality – of 29.5.  Germany’s external reserves currently stand at the order of magnitude of US$200 billion.  Germany is one of the world’s great international trading nations, with a diversified and highly competitive economy; a leader in industrial machinery, automobiles, petrochemicals, energy and high-tech.

Nigeria, on the other hand, has a GDP of US$485 billion and a per capita income of US$2,640. Our HDI hovers at 0.514, 152nd out of 185 countries. Our Gini Coefficient, standing at 43.0, may not be as bad as that of Argentina or Brazil, but we remain a highly unequal society compared to Germany. Our external reserves currently hover around US$38.2 billion.  Nigeria is a monocultural, petro-dollar economy in which poverty is endemic and energy and infrastructure deficits are astronomical.

Germany went through trials and tribulations to be where they are today: the devastating world wars; hyperinflation of the 1920s and ensuing depression; the upheavals of fascism and totalitarianism; and dismemberment of the country. The institutions of the New Germany – its social market and federal democracy – derive from the bitter lessons of the past.

The intellectual origins of the social market economy model date from the social debates that accompanied the 1870s unification of Germany under Otto von Bismarck. The great ideological debates between Austrian pure liberalism on the one hand, and Marxist socialism on the other, forced thinkers such as Gustav von Schmoller, Werner Sombart and Max Weber to seek  a middle way that will reconcile the two extremes of the ideological divide.

The social market economy was thus designed to be a  third way  between  laissez-faire  liberalism and  socialist economics. Historically, it was influenced by the philosophy of ordoliberalism associated with a group of economists and legal scholars at the old University of Freiburg. Ordoliberalism aims to integrate neoclassical economics with social democratic ideals and Christian social ethics.

It aims to foster flexible pragmatic market solutions while providing equal opportunities for all and protecting the unemployed and the weak and vulnerable.

Chancellor Konrad Adenauer and his Christian Democratic Union, CDU, were the principal champions of the Social Market Economy in post-war Germany; they laid the foundation of the so-called post war Witschaftswunder or “economic miracle” during the years 1945 – 1980.

Their economic strategy centred on national competitiveness, exports drive, vibrant SMEs, monetary stability, employee participation in corporate management, education and skills, subsidised housing, child benefits and dynamism of pensions within an over-arching economic philosophy of  solidarity, open and fair competition, free market principles, social harmony and welfare.

Particularly influential in this regard was Ludwig Erhard, Economy Minister of the Federal Republic of Germany during the years 1949— 1963. His colleague Alfred Müller-Armack, who was head of the Economic Affairs Ministry, was the first credited with actually using the term “social market economy”.

Although not enshrined in its constitution or Grundgesetz, the social market economy forms a pivotal part of Germany’s status as a free and open society; a society characterised by solidarity, social welfare and full employment. Under this model, it is the market that balances supply and demand through the price mechanism; ensuring that the means of production are used efficiently while consumer costs are kept relatively low.

(An Address to a Workshop on the Social Market Economy Model Organised by Konrad Adenauer Foundation, Abuja Transcorp Hilton Hotel, Tuesday 6 December, 2017)


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