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The PARPA: Towards achieving results - May 2002
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| 8. Towards results |
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Cipolla said that for the economy the problem arises when one goes over from the analysis of a short term period to [an analysis of] a long term period, which encapsulates the problems of economic development of the “underdeveloped”. He concluded then that “the development theory was and continues to be a total failure 36”, without another alternative except resignation and the analytical delights of Economic History. On the other hand, Galbraith said that, at the same time as we understand the historical roots of the economy, we can understand the present and its projection.
Having degrees in both Economic History and Development Economics, I would dare to disagree with Cipolla. It is possible, it has to be possible!, to theorise with a degree of acuity of projection in the area of how and what to do, where and when to invest, with which mechanisms of theoretical self regulation, and which are the instruments of analytical interaction with the development process.
8.1 In the theoretical field
Throughout the text we have been constructing some assertions which were based on empirical evidence, namely:
- the return of the theoretical exercise of political economy, in other words, the reinstatement of non-logical theoretical reasoning, for a subsequent conceptualisation in a logical-deductive structure;
- to adopt a philosophical stance in the face of science, which will have change as a constant, culture as a given, and the interaction of the effects in the postulates as a means to integrate the unforeseen;
- the non-theorisation around value judgments of a normative character;
- the acceptance as a departure point, and not as an additional, that the markets incorporate social relationships which are established by means of capital;
- the acceptance of collective rationalities, in parallel with individual ones;
- the construction of a strategy able to identify the forces upon which investment will unleash multiplying effects which will allow one to exit the poverty cycle.
It was equally mentioned that the reduction of poverty cannot be an objective in itself, but rather a result. The objective is to increase wealth, or the formation of capital and its distribution; for this end, it is indispensable that a strategy exists and that it obviously should rest upon a theoretical framework.
Up until our time there have been various theoretical attempts to explain growth and to project development. Adam Smith spoke about division of labour, David Ricardo about the productive reinvestiment of the surpluses, Karl Marx about the accumulation of capital and Schumpeter on the role of the ‘entrepreneur’ in innovation. After Keynes, Harrod and Domar concluded that the growth rate is a function of the relationship between the savings rate and the investment rate. Solow argued that technical progress is exogenous to the local dynamics, while Romer, Barro and Lucas advanced the theories of endogenous growth. In the 1950s and 1960s development economics was defending the dualist models; later on the productivist models of the Green Revolution were set against it, arguing that the poor [themselves] could also bring about development. The protectionist models appeared with import substitution and severe restrictions to international markets, leading to the neo-liberals in the 1980s arguing exactly the opposite.
It is obvious that a theory cannot be good or bad by itself alone; only its explanatory capacity is greater or smaller, and its capacity to forecast and project is more or less adjusted in function of the multiplicity of variables presented by the real world to the exercise of abstraction. However, there are moments in the history of science when simple changes do not yield results anymore and one has to think out everything anew, calling into question the very conceptual body. Everything leads us to believe that this is the situation in which we find ourselves. Theoretical production has been shattered. And when such a thing happens, nothing else can be done but to return to empirical evidence, be it for the enrichment of the presuppositions, or for the construction of a new theoretical body.
8.2 In the analytical field
It is in this direction that, with the limitations we have and with the means of co-operation at our disposal, we try to develop our research activities. But, taking into consideration that the process is extremely fast, and that the positions taken by the governments of today can have serious consequences for the future, we were forced to elaborate on a valid alternative for the ‘PARPA’ in Mozambique.
Earlier we spoke about strategic options which should be urgently addressed. Our [own] options would aim at:
- the adoption of a multifaceted development strategy, where one would tackle the question of economic growth by the exploration of energy resources by means of foreign investment; at the same time we would tackle the question of poverty by attracting domestic investment into the agrarian sector;
- the State must create financial mechanisms for reducing the risk of invested capital, including the revision of interest rates and return periods, in function of the productive cycles and the behaviour of international markets. With immediate effect [the State] must: co-participate in the costs of research, market research and information; and contribute towards the creation of compensation funds, in addition to what is already contained in the ‘PARPA’;
- a highly productive family agriculture;
- to add value to agrarian products by means of industrial transformation;
- co-participation of the private sector and civil society in the financial execution of ‘PARPA’s’ funds via the Central Bank.
8.3 In the normative field
So, on the basis of work which has been done so far, some elements were identified to enable the ‘PARPA’ to achieve results37:
- Adopt as a strategy: the development of agro-industry by the entrepreneurial sector, with the dual objective of increasing and assuring demand near the rural families, and to add value to the national product to be placed in the market and its niches.
- In order to assure that this strategy will yield results it is necessary:
- to establish entrepreneurial-type partnershipsll have the natural resources of the area which it occupies as capital. The former’s capital will be technology and the know how concerning administration and access to markets;
- to make ‘cheap money’ available to the domestic entrepreneurial sector;
- to reconstitute the ‘institutional fabric’, having as objectives the institutionalisation of the negotiation processes among the various stakeholders, the equilibrium in gender relations and the incorporation of endogenous and hybrid institutions into the dynamics of governance.
- And these are the conditions:
- the development of ‘human capital’, particularly by means of basic education, the improvement of the quality of water for consumption and of the general sanitation conditions;
- the decrease of the ‘relative distances’ to services, markets and resources by means of the construction of infrastructure, the availability of low cost transport and the progressive replacement of wood fuel by electric and fossil fuels.
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Footnotes:
- Cipolla, op. cit., p. 23.
- Cruzeiro do Sul. 2001. Relatуrio Final do Projecto de Seguimento do Programa de Desenvolvimento de Nampula. Cruzeiro do Sul & Josй Negrгo. 2001. Como induzir o desenvolvimento em Бfrica. CEsA/ISEG, Col. Doc. Trab. No.61, Lisbon.
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