Defending the developmental approach

Professor Go Shimada (PhD) is one of the Japanese scholars who have been advocating the introduction of Kaizen in Ethiopia. The management philosophy that the Asian power house likes to see flourish in Ethiopia has been slowly spreading around for some time now. Deploying the technicians and the academics to the country, the government of Japan managed to convince Ethiopian officials to labor on Kaizen. Professor Shimada was one of the scholars who met the late Prime Minister on several occasions who, in 2008, became more fervent about experimenting on the Japanese management philosophy  Kaizen in Ethiopia. Currently, teaching at the University of Shizuoka in Japan, Professor Shimada teamed up with Joseph Stiglitz, another renowned economist close to the late PM. The trio has one thing in common. They highly regard developmental state theory as the most trusted remedy for pervasive market failures in the underdeveloped economies caused partly by the neoliberal prescription. A few weeks ago, while professor Shimada was in town to attend a Japan funded regional seminar, Birhanu Fikade of The Reporter sat down with him for a brief interview regarding the application of Kaizen and the developmental state approach in Ethiopia. Excerpts:

The Reporter: The government of Japan promotes the implementation of Kaizen all over Africa. But do you think Kaizen is better fit to a continent where there is a lower level of manufacturing development?

Go Shimada: Kaizen sounds as if it is originally Japanese; but it’s very universal. Anyone would prefer to have a better working condition. Any worker wants to have a good relation with his or her superiors. Hence, Kaizen as a universal system can be applied anywhere; in any work stream. For instance, it can be introduced to a newspaper company, to a hotel, to a hospital and the like. Its basic foundation focuses on maintaining quality. The Japanese economy has enjoyed fast progress via Kaizen. Toyota took the initiative for that. Kaizen is the company’s philosophical foundation. Looking back on the history of Kaizen, it relates to Toyota. Back in olden days, it was a very small company and now it has become one of biggest global players. What I mean is that it is possible to introduce and implement Kaizen in Africa with the absence of big manufacturers or a big industrial foundation.

How can Kaizen be implemented in Africa and specifically in Ethiopia as opposed to its early days in the Japanese economy?

It is hard to compare Japanese companies with their African counterparts. To begin with, both have different historical roots. But I will say that Africa is amazing when we compare what is happening in Africa and the rest of the world. The Japan International Cooperation Agency (JICA) runs Kaizen projects across the globe and it is Africa which is making headways with Kaizen. More specifically, Ethiopia has introduced and implemented Kaizen amazingly. The commitment of higher level officials and the commitment of the Ethiopian Kaizen Institute (EKI) is something that is not observed in other places in Africa. Ethiopia took Kaizen seriously and it is becoming some sort of a national movement. It is a very important ingredient.

We know that there are other management philosophies out there. But, what is unclear is why Japan is so keen to introduce Kaizen in Africa?

It’s the history of our own experience. Yes, we knew about Basic Process Reengineering (BPR). We also know that there are other philosophies out there. But we knew them all through textbooks, not by heart. We knew Kaizen by heart since our elementary school days. We have thought about Kaizen since childhood. It helped us improve our lives and our companies’ performances. It is the only way of doing things that we know; and we know it by heart. That is one good reason to introduce Kaizen in Africa. Back in olden days, Honda and Toyota were very small companies. They started from garages. They have now become globally positioned groups of companies. We like to suggest the best ways to support Africa achieve success. We would then like to tell stories of that success to the rest of the world.

Kaizen was led and implemented by the private sector in Japan. But in Ethiopia the public sector is the one which initiated it. Do you see any problem in this approach?

There will be no difference. Don’t be misguided by the notion that the Japanese private sector is the one which took the initiative to implement Kaizen. It was not like that. Kaizen was first initiated by the government of Japan in those early days. We received aid from the U.S. and established the Japan Productivity Center (JPC) that was similar to EKI here. EKI was established when Ethiopia had received aid from Japan to set up a Kaizen advocacy projects. Hence, in Japan too, Kaizen is a government initiative. The nature of the individual countries’ methods in disseminating the knowledge of Kaizen, however, remains uneven.  In some countries, the public sectors work very well and in others it’s the private sector that remains handy for the job. In the early stage of the introducing Kaizen in Japan, it was the public sector that had done very well. Then later, Japanese companies became very strong in implementation. The know-how was very effective in Japan. But in South Korea, it was the public sector that satisfied the effective implementation of Kaizen. Hence what matters is the context rather than the entity that introduces the philosophy. In the case of Ethiopia, I think the public sector works very well and I also think that the current situation is very satisfactory.

Do you think African countries have started to take Kaizen seriously, or as you say “by heart”? What would it take for Africa to reach  the point where Japan is right now?

To be frank, I don’t know that. My last visit to Ethiopia, for instance, was five years ago. I need to understand what has been evolving through those years. But, I have been told that Ethiopians have become accustomed to Kaizen; and that they are familiarizing themselves with it. I see some people absorb and internalize Kaizen. I can see, for instance, how the general director of EKI has managed to familiarize himself with this concept of Kaizen. The way he explains it tells someone who grew up with Kaizen that it is possible to imagine that there are people who can take the philosophy very seriously. I believe many more people will soon start to know Kaizen by heart. You should remember that Japan first learnt about the concept of Kaizen from the U.S. Back in those days, during the post-WWII period, we sent 4000 Japanese to the U.S. to learn about Kaizen. We received assistance from the United States Agency for International Development (USAID) to grasp and learn about Kaizen. Today, if you ask an ordinary Japanese where we have obtained the knowledge of Kaizen, you might not get the right answer. It is because we were able to intertwine Kaizen with our culture. It’s hard to tell that Kaizen has come from abroad to Japan. Some people in Japan ask me how possible it would be to introduce Kaizen in Africa saying that it is a very Japanese system. But, they don’t know we also adopted it from the U.S. They assume that Japan is the first country where the philosophy of Kaizen has originated. 

Introducing Kaizen to some sectors has been particularly difficult. But, generally, how challenging was it to introduce Kaizen to some countries or perhaps to Ethiopia?

In Ethiopia, it is not challenging anymore because now there are quite a sizable people who know enough about Kaizen. We are expanding with Kaizen in Africa. It probably is a challenge for new countries to embrace and implement Kaizen smoothly at the start. They might be skeptical about the benefits and usefulness of Kaizen. It depends on countries’ situations.

Ethiopia vows to become a Kaizen-centric nation and has some plans as to how it will advance with it in the coming ten years. Perhaps Ethiopia is the only country which teaches Kaizen at territory level including at a PhD level. How do you see that? Is it advisable to do so?

Yes, I think so. Having a tertiary level education on Kaizen is very important. Educational qualification is necessary to enter into the formal job market. Launching programs in the undergraduate, postgraduate or PhD level is one thing that needs to be commended. That gives incentives for the young generation to know more about Kaizen. But, there is a challenge that should be noted. You should think about creating job opportunities for fresh graduates. As a university professor, the issue of jobs for graduate students is something that always haunts me. I think any university should consider that. It is very essential that Kaizen-oriented education should be considerate of the balance between graduates and jobs in the market.

Let’s talk about your bond with the renowned economist, Joseph Stiglitz. You have written books together, right? And can you tell us how you have come to work together?

In 2005, I was working for the embassy of Japan in New York at the UN representative office. It was during this time that we started to work with Stiglitz. We wanted to collaborate on MDGs and the role of Japan in tackling the challenges in the implementation of the MDGs across the world. I came to know him very well when I came back to work with JICA. Sadako Ogata, the former president of JICA and the then commissioner of UNHCR, requested me to collaborate with Joseph Stiglitz in research representing JICA. That was how we began to work together and we published the first book at the Oxford University Press. But, apart from that book, I did not write anything. I have contributed more in our second book entitled Industrial Policy and Economic Transformation of Africa. In the coming October, our third book is set to be published. We are also working together on another one.

Is the fourth book about Africa too?

It is not necessarily about Africa. Many people were inspired by Prime Minister Meles Zenawi. Although it will not mention him, Meles is remembered for arguing in favor of an African development bank. We were inspired by his idea. Hence our book focuses on the need of having an African version of development bank.

Both Meles and Stiglitz were close friends. Some say it’s Stiglitz who has mentored Meles on economics. Tell us how the three of you met up?

They have been close friends. I knew that very well and that was how we started to introduce Kaizen to Meles. We brought Stiglitz to Addis Ababa. We set up a trio meeting among Stiglitz, Meles and officials of JICA. We gave an account of Kaizen and the late Prime Minister became very much interested in Kaizen and wanted to go along with the idea. He asked us to arrange ways of implementing Kaizen in the country.

So you were one of the guys who persuaded the Prime Minister to introduce Kaizen?

Well, you can say that.

Economic transformation in Africa seems be the topic of the day. But because Africa doesn’t have a manufacturing base and since it lacks the basic structure for industrialization, do you think it is the right time for transformation talk in Africa?

We should bear in mind that transformation doesn’t necessarily mean drastic change. Since the 1990s, the manufacturing sector in Africa has been declining gradually. We need to start to do something and reverse the declining trend. That requires us to talk about transformation. I don’t know whether I should say this on the record or not, but successful transformation in Africa hangs on the role of government and the notion of developmental state. It is obvious that Africa has suffered a lot from the Structural Adjustment Program (SAP). The policies prescribed by the international institutions have contributed very little to the development of Africa. For that matter, Stiglitz was inspired by the Prime Minister and his (Meles’s) idea of developmental state. This in turn gave Stieglitz some ideas and later he was keen to promote the establishment of the BIRCS bank and the setup of the Asia Infrastructure and Investment Bank (AIIB). Stiglitz has promoted the developmental state ideology together with the notion of strong industrial policy and Kaizen as a means of transforming African economies. You can’t change things overnight. You can’t change the way economies are structured instantaneously. But, you can have governments devise ways which would gradually lead to the path of transformation. They can adjust the momentum towards that end.

Stiglitz, you and the late Prime Minister share the idea of developmental state and promulgate ideas as to how it would benefit nations. But, I shall bring this to your attention that some people argue that this theory has some negative implications for the political space in these nations. Furthermore, these groups argue that the private sector is forced to plunge into a state control not to mention the deficits in the areas of freedom of expression and human rights. So, how do you take these assertions?

Remember that Africa has suffered a lot by the influence of the Structural Adjustment Program and the policies prescribed by the program. It was a market-oriented approach which dictates that markets ought to/should fix everything in the economy. It was a kind of dogmatic principle which Africa is required to adopt. That policy has caused havocs in many ways. But, if you look at most Asian countries, most of them would tell you that they have followed a developmental approach in their path to industrialization. China, South Korea, Japan, Indonesia, Thailand, you name it all followed the developmental approach. But African countries remained out of the equation. Hence, it is a-going-back-to-normal approach; and currently many Africans have the desire to become developmental states. Theoretically, Joseph Stiglitz argues that in some respects, markets do not work or answer the basic questions. At some point, markets fail us. It is very difficult to know what kind of product somebody is producing for you. Market doesn’t work in that case. When market fails the government is required to step in and normalize the situation.

But if the developmental state theory advocates the role of the government in this context, don’t you think that it gives governments a privilege to have control over everything that the economic actors are doing?

There is some harm as well for sure. Everything is not perfect. If you want to eliminate all the risk regarding corruption or abuse of power by the state that might come about due to developmental approach, the only way you can be completely free from such pressures is by pursuing the good old dogmatic market-oriented approach. But, we all know that doesn’t work either. Hence, you don’t have to kill the developmental state argument just because you worry about the state having too much power or because of the risk of governance problems or corruption. I am not saying that these factors are not important or that it is not necessary to worry about these anomalies. I don’t want to sound like I am saying that corruption or bad governance is the least we need to worry about. But, we need to maintain and manage the balance. Japan is not immune to corruption and similar governance scandals. But we learn from those mistakes. We don’t say because of corruption we don’t need developmental attitudes. Corruption might happen but how do we recover from that sort of scandalous act? How can we help good governance flourish is the more important question that we need to worry about.

What can be said about governance and leadership in Africa? Is it fit to host the advent of developmental states in full force?

I am not a political scientist and I can’t say that I understand the challenges of governance in Africa. Generally speaking, I think it is getting better. One way to see that is getting better is through economic growth. Throughout Africa, we all are witnessing fast growth and constantly changing economies. We can say conflicts are declining when compared to the situation in the 1990s. I think it has been doing very well for some time. But, the question is how to sustain it. The far more danger comes from the demographic pressure. Africa has a very huge population and one of fastest growth rate which is happening at the moment. When countries are unable to provide jobs for the ever increasing population, if the young generation can’t have a means to sustain everyday life, then there will be a real danger. That is why you can’t let the market weightlift everything for you.

Kenya is preparing to host the sixth Tokyo International Conference on African Development (TICAD) in August. Japan initiated and has hosted the TICAD platform as a token of friendship and partnership with Africa. But, the TICAD has competition in the form of Sino-Africa, India-Africa and the U.S.-Africa forums. Although TICAD has been there since 1993, it has never been that much popular across Africa. Why was that and what possible turns are expected from the Kenya summit?

The competition has become more intense. We need to ask ourselves if those countries while instituting those forums really have African interest at heart. The answer is no. When Japan started to host TICAD, the attention of the world towards Africa was totally different. Western donors didn’t have that much of commitment in terms of Official Development Assistances (ODA) to Africa. The extent of that was reflected when many western donors were seen shifting aids from Africa to Eastern Europe. That was the time when Japan came along to assist Africa and introduce the TICAD forum to be held in Japan. Now, since the economic prospect of the African country is becoming a center of attention at the global level, some are imitating the TICAD format and I think it’s a positive trend for Africa. It is good for the continent to have more platforms to interact on and exchange ideas about development and partnership. But, if Japan remains unpopular in Africa then TICAD will face difficulties. We need to promote more.