World War II changed the world completely giving leadership to the United States as the world’s leading economic power. The Soviet Union emerged to rival the US militarily until its collapse in the 1990s. The United States remained as the only superpower. Close to the heels of the US was Japan.
By 1986. Japan’s GDP almost matched that of the US. Japan joined World War II to fight for markets and it lost the war. But starting in the 1970s. Japan started taking over world markets without firing a shot!
All they did was develop their own technology products and become ruthlessly efficient giving them the number two position in the world. Japan overtook Germany, France, Britain, Italy and India to become number two country by 1980.
It was on the brink of becoming number one, when in the New York Plaza Hotel meeting in 1986, Japan was forced to revalue its currency to support the American economy! The miraculous rise of Japan was attributed to their planning, execution, competitiveness and the pro-people management style. Based on the reforms by Deng Xiaoping, the Chinese economic juggernaut started rolling in the 1980s and 30 years later on China emerged number two economy in the world! There is no doubt about it, China will ultimately take the number one position and the Coronavirus is the turning point.
There is a lot of politics and rumour-mongering about the source of the virus and why it appeared on earth. Those who know, know the source and why it is so. It is not for discussion in this article. The virus is reported to have first been seen in China in December of 2019.
China in its detailed plans and ruthless efficiency managed it and today China is back to normal. It is already taking leadership in global economic affairs. The United States which is one of the developed countries that got the Corona problem last appears to have a worse problem than what China did have.
On Sunday, March 27, 2020, the US had registered over 125,000 cases compared to 85,000 China registered at its peak.
The tables are turning. More importantly the economic table. Recently the US started punishing China by locking out the Chinese electronic giant Huawei from the American economy. It is said that the main dispute between China and the US is who is to take the lead in the development and management of 5G. It seems China has taken the lead and this has worried the United States.
The biggest challenge facing American Business Chief Executives today is the adoption of technology emerging from the 4th industrial revolution and of course China. Chinese economic might is a challenge. China is giving the west sleepless nights as it outpaces every country’s economy.
The Fortune 500 list of the biggest 500 companies in the world, has fewer American companies today! The number one country is China. The biggest banks in the world today are not American banks any more, they are Chinese banks.
The number of dollar millionaires in China will soon surpass that of the US. It is Chinese markets now that are important.
Europe, if it remains united, will follow China as the world second most powerful nation (group) but that is only if Japan fails to play catch up with China.
Japan’s biggest limitation is population, Japan is a wealthy country, highly competitive but because of the low population figure of 126 million when compared to China 1.4 billion and America 375 million and some of its neighbours, it will be dwarfed in terms of total GDP though it will continue to a leading country in terms of per capita GDP.
At the organizational level, the Coronavirus has already brought fundamental change. With the shutdown, an organization that cannot figure out online business to survive is dead. The rise of Jeff Bezos of Amazon and his wealth in the US along with Jack Ma in China was from spotting online business opportunities as the way ahead.
This is now consolidated, if you are not in it you are dead. As organizations and countries emerge from the shutdown those countries and organization that can leverage IT will dominate the world. Change is coming from blockchain technology, the Internet of Things and robotics. Those who are ready for it will survive.
Can Uganda emerge from the Coronavirus crisis and prosper? As developed countries find money for stimulus packages to revive their economies, Uganda and other poor African countries will have nothing to show. Possibly more dead people from the virus.
In economic terms, we already live off debt. What more can we do than get more indebted? Without adequate medical facilities, Africa has to beg for test kits and medication for treatment from the developed world. The Coronavirus should have brought Africa together but it hasn’t.
We should be collaborating and learning from one another, but we are competing. We should be producing goods together. The worst is yet to come to Africa. Ignorance appears to be our biggest problem. The East African region should have come together to produce masks and test kits rather than import them! Segmentation of our markets has been our biggest problem. It will continue to be.
The Coronavirus has put the world economy on a war footing. Governments must take centre stage. It was opportune for the developing countries governments to exploit these opportunities to create change in their respective economies. It seems the opportunity has gone past and by the way the worst is not yet over for Africa.
We still have to deal with medical issues before we tackle the economic ones. Is Africa ready for change, I don’t think so.
About Author: Prof. Juma Waswa Balunywa is the Principal of Makerere University Business School, a leading public institution of higher education in Uganda