UNITED KINGDOM – The last two decades have seen the International Development Organisations and Bilateral Agencies advocating the ideology of private sector and civil society as drivers and agents of change and socio-economic development in the world. There have been so many slogans derivatives of that ideology; we have had phrases like “rolling back the state”, ‘Decentralisation’ ‘Contracting out’ ‘Outsourcing’ Public-Private Partnership (PPP), ‘Reform agenda’ Structural Adjustment Programme (SAP) etc. These are policies and ideological propositions that have found their ways into many developing economies in their pursuit of developmental goals. The fundamentals and basis of such ideology hinges on rolling back state apparatus and allowing the private sector to be the driver and agent of development and economic change. Their activities were envisaged to generate employment, sustainable development and economic growth.


Ironically, the current global economic recession and crisis originated from the activities and over-indulgence of big corporate private establishments. The ripple effects have left a crippling impact on the world economy. Needless for me to elaborate, on the greed and insensitivity of the sector on who lays so great an expectation to drive world growth, regional and international developmental changes. While the world relaxes in the knowledge of the seeming competence of the players within the private sectors, while government of various strengths relied on the capability of the Independent, Organised sector to stimulate and maintain growth and industry, unfortunately, there was a growing moral and professional debilitation in the fabric of the sector. First we heard of was the accounting scandals of ENRON, and then came an avalanche of other revelations and catastrophic reckless risk-taking culminating into the present global recession.


Since then, there has been a Paradigm shift in the way the world view the ability of the private sector establishment to continue driving world economic development. The evidence abounds that the private sector, corporate establishments have over-indulged in personal enrichment and profligate activities to the detriment of millions of helpless world citizens. We have heard of Bernie Madoff and Alan Stanford cases in the USA, Royal Bank of Scotland (RBS), sub-prime mortgages of Freddie Mac and Fanny Mae, HSBC, Northern Rock in the US and UK, the catastrophic paralysis of the automobile and construction industry, Stock market meltdowns across the globe leading to evaporation of pension funds and life investments. In Africa, particularly in Nigeria, various banks and private establishment have engaged in activities akin to breach of trust and professional malpractices leading to misinformation to the investing public about the true position of their businesses.


The current scenario has prompted a New World Order where the private sector now increasingly look up to the state for bail-out packages from the current self-imposed and liable economic quagmire. Many governments have had to write off toxic debts, re-capitalised the private sectors to sustain their production and avoid bankruptcy. The recent G20 meetings of world leading economies have seen an agreement to pump $1.1 trillion to the world economic system, invest $1 trillion into the IMF to promote developmental activities across the globe. Major UK banks now have the tax-payers funds and stimulus packages representing 60% of there capitalisation. Government now provide credit and mortgages guarantees on behalf of their citizens. Across the Atlantic, in the USA, major car industries have multi-billion dollars of government and tax-payers funds in them to facilitate their business activities and stem the spate of job losses and family woes. The livelihood implications of this is evidently far reaching, also the social consequences such poverty, family breakdowns, increasing crime and health burden are matters that would need again the state to take responsibility to cushion the effect and reverse the trend. This is a clear departure from the ideology of the 80s and 90s of less of states and more of the private sectors in the efforts of achieving developmental goals. The proponent of the ideology must have learnt by now that there are limitations to the idea and every good idea can easily be hijacked by those who by virtue of their position have grown so close to the state apparatus and as a result are immune to the consequences of their actions and inactions.


If we look at Nigeria as a case study of the new world order, particularly, looking at Lagos State since the inception of the current administration. One would begin to wonder whether really, there should be any dependence on the private sectors in the development agenda of any nation. The current government of Gov Raji Fashola, has shown increasing state presence in every facet of socio-economic changes that has creditably taken place in that state in the last two years. It is now conspicuous evidence that, it is not ideology that will drive the world growth but good, focused, committed and trusted political leadership.


The agent of growth and infrastructural changes being witnessed in Lagos State today is driven by the vision and tenacity of one man and his cabinet. In the midst of imminent collapse of many private institutions, in the face of this pervasive global economic recession, the Government of Lagos State is evidently weathering the storm with careful and systematic pursuit of their development agenda cutting across every indices of governance. Many stories of distrust and fraud that appears in the news today emanates from the organised private sector, examples such as stocks and shares price fixing, short-selling, insider trading, wholesale theft of depositors funds, profligate enrichment and dereliction of professional code of ethics and responsibility. These are factors that are alien to the environment in which the current Lagos state government is operating. These virtues are deliberately created and supported by strong and competent leadership in the state. The state is more and more involved directly and indirectly in the affairs of his citizenry by the popular people-oriented policies and programme embarked upon by the state government. Lagos state is just an example of what the new world order is, provided good and purpose leadership is given.


The activities of the G20 world leaders and the joint agreement, particularly, the pro-active effort of Britain Prime Minister Gordon Brown, is again a buttressing example of how the new world order and paradigm shift in how the world development will be shaped in the coming decades. The collaboration between regional leaders and government to stem the depreciating global economic situation is another example of what the new world order is. The lesson of these crippling global recession and economic crisis is that, where the private sector is needed to participate in socio-economic development and nation building, thorough regulatory oversight is needed from the state, to monitor abuse and excesses and take prompt actions before the effect trickle down to the system of human and government livelihood. Also, regardless of how innovative the private sector is, their primary goal is naturally for-profit making and every other agenda is secondary. Therefore, it goes without saying that, government is the one with the primary responsibility of looking after their citizenry, amongst whom the organised private sector is not exempted, hence, the call on government to bail out from the current problem. In situation where partnership with the private sector is key to the delivery of any developmental agenda, then the terms of agreement and regulatory oversight has to be clear and the end-point has to be well defined with practical ways of measuring whether the plan has been delivered accordingly to the standard defined ab-initio by the state.


In conclusion, the state is still very relevant in the scheme of global development and the success of this on a short or long term hinges on pro-active, pragmatic and purposeful leadership and less on theoretical and hypothetical ideological substrate. The lesson of the prevailing global economic crisis cannot be lost on all who are agents of positive change in the world over.


Dr Olayiwola Ajileye is a Clinical Psychiatrist, an Alumnus of The School of Public Policy, University of Birmingham, Chairman of Crimewatch Communications, Nigeria and Director of Champions for Nigeria (CFN), UK-Based organisation that promote excellence and positive leadership.

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