Was 2017 year of cooked economic statistics?
The year was an epochal year for Malawi on many fronts. Economic indicators created a lot of controversy. For a nation used to bad news, the idea that some good news could come from Malawi was for others unimaginable. The accusations of “cooked” statistics made headlines every time the economic indicators improved. The song from opposition politicians was always that, if things were improving, why were the people not reaping the benefits? Why could the people not immediately see the benefits of such improvements? This was then the basis of the famous accusation that, somehow, someone at the National Statistical Office (NSO) or the Reserve Bank of Malawi (RBM) has been given a new position of “chef” with the mandate to cook the figures.
One would understand the obsession with the “notion” of immediate results; one would excuse those who have been so used to the new world of “instant” everything and, therefore, expect that there should be immediate change in people’s lives as soon as the indicators improve. Of course, one needs to appreciate that economics, by its very definition, is about people, it is about how people make decisions on the allocation of their scarce resources for maximum utility or satisfaction. It is about the never ending battle to use the resources at their disposal to improve their lives.
Economic indicators are supposed to describe the condition of the country’s economy. The problem is that it is tough to put all these statistics into some sort of true picture of the economy unless one understands the concept of economic indicators. Economic indicators come in three categories. Leading indicators predict the future of the economy. Lagging indicators describe what has happened in the past in the economy. Coincident indicators describe what is happening in the economy right now. All are important in describing the total economic picture and trying to predict future economic activity. So, before one claims that the economic indicators have been “cooked”, they should understand in which category that particular economic indicator falls into. For example, Gross Domestic Product is a coincident indicator. It moves with the economy and describes what is happening right now while inflation is a lagging indicator since it describes past economic activity.
When NSO or RBM releases economic indicators, don’t just dismiss them. They really do help us understand and predict economic activity and will help you understand what is going on in the economy on a monthly, quarterly and yearly basis. The opposition seized on the people’s insatiable desire for improvements in their lives and rode on the dangerous path of dismissing any good news from official institutions mandated to produce statistics in Malawi. But some in the opposition seem to have adopted an attitude of political spite. So, the opposition had better be warned that people, ordinary people, have collective wisdom and will not swallow hook, line and sinker anything and everything coming their way from whoever and whatever. People are guided by an internalised sense of fairness and justice and, if things improve in their lives, they do not need to be told. They will know. Similarly, if things are getting worse in their lives, they do not need a bunch of well-paid and self-serving politicians to tell them so. There will come a time when it does not matter to the people who says this or that, as long as he or she delivers.
The type of opposition that has reduced itself to the habit of condemning anything and everything associated with the government, citing, among others, what they call the lack of “transformative leadership” will not improve the ordinary people’s lives. Unfortunately throughout the entire 2017 there have been calls for “transformative leadership”, and in the economic world the word “transformative economic development” has found a new home in many a critic of government efforts, however, there has never been any national consensus of what “transformative” really means. What constitutes “transformative economic development?” So before the opposition takes on the role of spokesperson for the idea of “transformative leadership”, it would be prudent for them to spell out what it does or does not mean?
Politicians in Malawi should be afraid of some of us, the self acclaimed “experts” unless they want to be misled by armchair experts guided by theoretical position on social media. They profess knowledge without taking any action to realise the actions emanating from their theoretical propositions. Their ideas require them to be physically involved in economic and political struggles, but they instead choose to be intentionally dismissive of real world issues and problems so as to continue believing in the false reality that their views create. They view the world solely according to their own perceptions, instead of concentrating on what they should really do, which is to absorb the physical and practical reality of the situation. Instead, they distort people’s understanding of complex issues by abusing their knowledge. Simply put 2017, was not the year of “cooked statistics!
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