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The development economist and entrepreneur, Dr. Kofi Amoah says Ghana requires a new approach to economic development -- one that is founded in a national plan or strategy that seeks to maximise the benefits from the country�s abundant natural resources. In the serene ambience of his office in Accra, Kofi Amoah ponders the paradox of Ghana: a country of immense natural wealth yet surrounded by poverty and joblessness while its political leadership gropes for solutions. Only a change of course -- an �economic revolution� --will alter the country�s fate, he told B&FT in an interview. �I�m calling for a revolutionary approach to Ghana and Africa�s economic development programme. No nation on earth has developed based on the largesse of others. You have to think through your own natural resources, your human capital, your land resources, and your mineral resources, as well as understand the global environment you live in and how you use these resources that you have to build an economy that creates a better future for your people,� he said. That urgent new direction, he added, must embrace the idea of national development planning and state subsidies for indigenous producers utilising the resources of the nation to create products for the domestic economy and export markets. �We must have a plan. The elders tell you that if you don�t know where you are going, you will think any route can take you there. If you don�t have a plan that understands the resources which you have and how you�re going to get forward leveraging what God has given you, then how do you develop? �We started with Kwame Nkrumah�s seven-year development plan. Look at how far we got: we got the Akosombo Dam because he saw that without power we weren�t going to get anywhere; he expanded agriculture because he saw that we had fertile land and so said: �let�s mobilise our people to expand cocoa production�. Tiny Ghana became the world�s largest producer of cocoa. Why? Because there was an intelligent public policy: support these farmers with loans and seeds and extension services and jute bags and buy the cocoa from them. Also, have the sophisticated people to package it properly and market it to the outside world. We have got to another stage where we�re talking now about how to leverage the cocoa beans. Very soon, China is going to surpass the United States as the largest economy in the world. Thirty or forty years ago China was poorer than Ghana. How did they do it? That�s my point.� State intervention, trade protection Rather than be cowed by the stigmatisation of state planning and intervention within the global mainstream of policymaking, Dr. Amoah said Ghana must be selfish and protect its own -- just as today�s powerful nations did in their infant years. He told the B&FT: �We need a more interventionist state, because if you look closely at every nation�s initial development programme -- the United States, United Kingdom, Japan, Germany, China, South Korea -- they all had serious state intervention leading the growth of the economy. Of course, the private sector was a partner -- but in the initial stages the private sector was a junior partner whose hands were held by the public sector through cheap loans, subsidies, tax-breaks, [and] nurturing them.� Another lesson of history is that infant industries need government protection in their growth stages up to the point where they have the muscle to compete with foreigners, he said, adding that Ghana must adopt this wise strategy if it wants to build its own successful indigenous companies. �All the developed countries didn�t talk about free trade until they developed. When the United States started, their tariff regime was like 30-40 percent. The UK had protectionist policies for their infant industries. Germany did the same thing -- Korea, Japan, all of them. China joined the World Trade Organisation (WTO) only recently -- about a decade ago. They decided that only when they were ready would they join. You don�t join when you are not ready and be saddled with constraints. I wouldn�t mind Ghana getting out of the WTO.� Dr. Amoah admits that the best examples of state planning -- China, Japan, South Korea, etc -- are countries which during their planning years had the stability of a one-party state or military dictatorship to enforce the plan and ensure that every corner of the society abided by it. But he insists that having a national plan of development is not incompatible with Ghana�s multi-party political system. He believes the freedoms enshrined in a democracy underline the creativity of people, which is what inspires them to invent and create new things. �I don�t think the two are mutually exclusive. This is why I maintain that the discussion of a national plan must be on a national basis. We must discuss this for everybody to understand and buy into it. And when we do that, during elections -- because everybody understands that we bought into this -- any party that wins will have to travel the same way. But if the understanding of the citizens is not there, then it will become difficult. This is why I believe we must seriously start discussing and debating what is the right development road for us to travel based on the resources that we have,� he said. A strategy for developing Ghana So what should be the pillars of a plan or strategy to develop Ghana? �The low-hanging fruits,� said Dr. Amoah, who proffered a model -- a �development triangle� -- that will put the country�s idle land and human resources to use, backed by government support and finance, to return benefits in the short-term and lay a rock-solid foundation for the future. �From the economics that I studied, if you put land and people together you create wealth. We have abundant land that is five degrees above the equator. Our Ministry of Agriculture has wisely mapped out what it calls the �soil-use map of Ghana�. Every part of the nation has been mapped out -- where bananas grow, where tomatoes grow, oil palm, etc. We also know that a lot of our land is very fertile. So I believe the pillars of our development plan, initially -- because it cannot be static, it has to be dynamic -- must of necessity have these three legs of agriculture, manufacturing and the financial intermediation strategy of government to support the success of agriculture and manufacturing.� The policy framework for agriculture must target output maximisation of various crops and vegetables, he said. Citing the cocoa sector as an example, he explained that it must involve government�s provision of land and production inputs -- tools, seeds, water, and fertiliser -- to small-scale agrarian families who will also benefit from agronomic assistance such as extension services and the advice and guidance of agricultural experts. There would also be intermediary businesses buying the produce for packaging, processing, storage, marketing and distribution -- a stream of activities that create jobs for people with different skills sets. The next stage is to catalyse manufacturing using a system of incentives and state protection. The goal is to substitute imports and have the discipline to export. This requires, he said, subsidies for manufacturers in the form of cheap loans, tax-breaks, supportive research and technology transfer assistance. According to him, �the incentive system must be clear, unambiguous and transparent; and it must be enforced. And then you have a disincentive policy against that which is not in the interest of economic development at this time � like the UK did when they banned imports of clothing to protect their industries, and the US did through their ban on the export of high-tech machinery�. If agricultural policy is important to the development of a country because cottage-farming can provide a quick boost to output in rural-based economies, and manufacturing policy is important because an infant-industry strategy offers the fastest way to shift the country�s economy toward more value-adding activities, then finance policy is the necessary ingredient to channel the nation�s limited resources into these two areas, Dr. Amoah explained to B&FT. Government must invest its tax and resource revenues in agriculture and manufacturing, and reform the financial services system so that financial capital is directed into these areas of priority for the state. �If you have a situation whereby banks are making record profits -- I�m not against that because businesses which don�t generate profits become stunted or die -- but there is a decline in manufacturing companies, there is a decline in start-up companies, and there is a decline in job-creation: we have a problem. Banks are the oil for the engines of development. They must be oiling the wheels of development. And therefore, if they are making profits and the wheels of development are not being oiled, the way they are making their profits is not helpful to our forward progress.� Discussing the potential for tapping into private finance, Dr. Amoah said the release of equity buried in people�s private homes alone will raise billions to finance productive investment in the economy�s priority sectors. He called for a US$1billion fund for agriculture and manufacturing. The money would be invested in land reform, crops and vegetable production, and agro-processing enclaves to process produce for exports. History will be on Ghana�s side if it takes this path, Dr. Amoah said, stressing: �If Ghana and Africa start dissociating themselves from the wise policies of nations that are now rich, because we are scared they will label us as central planners and communists, then we�ll not develop�.