Friday, May 19, 2017

The Psychology of Owing and Being Owed

A few months ago at the G20 Summit held in Hangzhou, China, Jacob Zuma, the President of South Africa, gave an interview to China Central Television on the Summit's sidelines.  One of the key topic of the interview was the recent economic troubles faced by South Africa, especially pertaining to the financial downgrading associated with the recent sacking of the reputable finance minister Pravin Gordhan.  The interviewer questioned Zuma on how the lack of confidence international markets and rating agencies toward South Africa will impact the South African economy in the coming months.

True to his usual sensationalizing party lines and self-image, Zuma wasted no time twisting the question to his agenda.  Speaking about the current economic downturns of South Africa, Zuma immediately diverted to talking about the negative impact of the colonial legacy on today's underwhelming economic performance of the continent, and further pointed out that the non-African world has a duty to continue supporting Africa in ensuring that the continent develops.  He ended his digression by noting how himself, as the only African at a world-class platform like the G20, represents all African nations in their demand of international help.

And here it is, the leader of African continent's most advanced economy, in some polite and roundabout wording, accusing the rest of the world for keeping the continent down economically.  Reinforcing an oft-repeated claim of detrimental foreign intervention in Africa, Zuma pretty much concluded that non-African world owes big time to Africa.  As such, Africa, no matter how much economic assistance it receives from the outside world, is completely deserving of the assistance.  If anything, such assistance should continue well into the future since the damages of (and the guilt associated with) colonial legacy is not yet rectified.

While Zuma was busy giving a moral lecture on how non-Africans owe much to Africans, back on the African continent, the opposite is unfolding.  Here, loans are casually provided to Africans by non-Africans, and there can be no denying that in the most direct financial sense, Africans owe much to non-Africans.  This is not just the author's personal experience with his work, but also reflected in hundreds of other foreign investment programs, many of which involve low-interest "concessionary" loans freely handed out to governments.  Even in the most rudimentary cases, contracts enforce the need for repayment.

Yet, the two scenarios, while same in nature, have completely different outcomes.  Zuma's tirade on the international stage has plenty of supporters, many of which are non-Africans enthusiastic in pointing out how those who disagree with such sentiments are either immoral for refusing to atone for colonial sins, or are present-day neocolonialists hellbent on keeping Africa poor and oppressed.  The argument that Africa is owed much by non-Africans is used by Africans and non-Africans alike to justify millions spent in aid projects ranging from the most grassroot health programs to top-down "institution-building."

In contrast, when loans given to Africans, both at the government and the individual levels, are due to be paid but are not, such moral proselytizing becomes a massive taboo for chasing back the money.  For one, the same groups that argue for need for continued aid to support Africa argue that the "cycle of debt imposed upon" Africans is what keeps the continent poor.  While it is certainly true that unrestrained debt, especially in a cash-poor, resource-poor state, does not improve the state's performance, to imply that "debt ought to be forgiven" is the solution only creates a mentality of frivolousness to debt repayment.

The author, unfortunately, sees too much of this in his own line of work.  While there is no doubt that most loan-takers are honest and do pay back in time, the small minority shows absolutely no remorse for being late or unable to make repayments.  When asked why repayments have not been made, a casual laugh and a flippant statement of "don't have money" is all that are given.  The kind of guilt that Zuma tries to channel in non-Africans is not found in their attitudes or words, and certainly there would be no apologies or feeling of shame in the interactions.

Such collective nonchalance toward concept of "owing things to others," combined with the aforementioned insistence in having plenty of things "owed by others," should cause for serious worry for future positions of Africa as it continues to integrate with the global economy.  As projects such as the One Belt One Road initiative provide billions of loans to the continent, not taking the concept of "owing" seriously could spell disaster in the long-term.  After all, in the context of international business contracts that multinational firms and institutions operate in, moralistic arguments by the likes of Zuma cannot replace cold legal arbitrations.

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