Structural Changes and Organization

One of the most important tasks of becoming a developed country is the ability to create an organized civil society where the people and surrounding physical structures are not at constant collision and disruptive interaction. Rather, it is an environment where human activities around natural and synthetic infrastructures are functionally seamless. Fortunately, wealth or poverty is not a prerequisite for creating a developed civil nation as both rich and poor individuals have the capacity of creative thinking that could lead to orderly society. It is therefore, inexcusable for poor countries to attribute the underdevelopment of their countries to national or individual poverty. Organization, in large part, does not require formal education, but a sense of ensuring that humans and their environment do not destructively collide. It is unfortunately troubling to attribute the harmonious coexistence of different forces and players in a developed environment to wealth or race or terminal education. There is no reason for any country to deny their capacity to organize their society to function smoothly. It is however possible that leaders and people in many underdeveloped countries may lack the motivation to initiate the process of development due to generations of disorganized leadership. This book provides clues and motivation to assist leaders and peoples who are willing and dedicated to make the first step and then other steps will follow unabatedly.

The initial and simplest changes that must occur to jump start development in any underdeveloped country is that the people and leaders must first acknowledge underdevelopment and agree to reverse the trend. Next is to craft a development plan that is achievable, sustainable, and tailored to the needs and structural make-up of the society in question, followed by building strong institutional infrastructures that ensures innovation, development, and management of economic, social and environmental infrastructures. Building institutional infrastructures in a developing country involves strategic restructuring of existing functionless government institutions to operate at a capacity of small civilized counties in developed nations and continuously adding and updating the functional capabilities of the institution as need arises. Most developing countries lack institutional and structural foundation upon which growth and development of modern society could flourish. These institutions are mostly government owned and have had to function erratically from one leader in power to another. Therefore, there is lack of consistency and very minimal contributions of the institutions to the development of a modern civilized society.  In many instances, the laws and policies establishing the institutions have been systematically eroded or mischievously dismantled, leaving it to exist as a huge waste and a fertile ground for financial misappropriation and/or fraud.

Financial Institution

The financial institution is the bedrock of national and local growth and development. Its operation should be geared towards assisting foreign and domestic business organizations, as well as public agencies, to invest in infrastructures that provide jobs for ordinary citizenry and at the same time contribute to decent and healthy environment. Without opportunities for jobs for all levels of manpower for the majority who are willing to work, it might be impracticable to transition to civilized or developed society. Financial health of a nation are linked to human resources and benefits such as living wages/jobs, housing, health care access, and investment on retirement/senior citizens among others. In most black nations, these basic facilities are largely non-existent or existing at an epileptic proportion that is not only meaningless, but that defies economic laws and calculations.  Currently, public and private sector investments in black nations are grossly incapable of providing jobs for the majority of their citizens. Therefore, a plan must be crafted to attract investment that creates jobs from foreign investors and tourism. Such plans must ensure stable country devoid of wars/civil unrest, corrupt public and private institutions, and insecurity of life and property. The financial institution must be supported by incorruptible judicial and security apparatus that shines the light of transparency in the entire private and public sectors. The goal is to ensure that private and public agencies operate in a stable, consistent, and enduring financial environment that is predictable and that provides level playing ground for all competing local and international parties and stakeholders.

Cash economy is the default fiscal policy of most underdeveloped nations and the result is a system that defies fiscal regulation and fraught with monetary impropriety and fraud. Individuals in high positions in government have taken advantages of the loophole in the system for generations to divert public fund to private account without consequences. One of the fiscal changes needed in underdeveloped economy is to move away from cash economy to cashless economy for all local and international monetary transactions. Due to the absence of social security number or national identity number in most underdeveloped nations, the best next alternative is to obtain the biometrics (finger print, photo, and DNA) of all account holders that is difficult to forge and to intermittently update the biometrics at every major domestic and international transactions. In addition, bank accounts must be associated with international passports for all government workers and for all those who wish to travel overseas for vacation or business. The passport must be run through international banking and money laundry detection system for fraud monitoring. Public office holders must not open bank accounts in foreign countries during and after 5 years of leaving public office and even when they do, they must undergo local and international audit and must not have more than $2000 equivalent of local currency at any time. Money transfers must pass through local and international fraud monitoring agencies.

Business and personal monetary transactions must make use of debit or credit cards and all loans given to businesses and individuals must be deposited in credit cards so that the transactions could be monitored by the lending bank in case the borrower engages in fraudulent practices. Businesses must not accept cash transaction greater than the equivalent of 20 dollars in local currency.  Commercial banks must report deposit or withdrawal of cash in excess of 1,000 dollar equivalent of local currency from businesses and individuals and such businesses and persons must be meticulously investigated for money laundering and fraud. Cashless transaction must be made electronically using cell phones and computers, or calling the banking associates to conduct the transactions on phone. All commercial banks must make effort to have 24 hour phone banking services to ensure smooth operation of the cashless system. Businesses or personal account holders with 100 thousand dollars or more equivalent of local currency in either checking or savings account must be investigated to verify source of income and transactions that led to the accumulation of the fund. Also, triggers of potential financial impropriety must be developed to investigate all monetary transactions once there is a red flag in any account or transaction irrespective of the amount in the account. Local banks must be mandated to affiliate with recommended reputable international banks for purposes of specific international transactions and fraud monitoring and detection services and not for ownership and control by the foreign bank.

Underdeveloped countries must use the leverage of the consumption of some imported goods to request manufactures of such goods (e.g.  Cell phone companies, car companies etc.…) to cite their manufacturing plants in the country in order to create jobs for the local communities. This will not only discourage importation and monopoly of such goods by few powerful individuals, but also help conserve foreign exchange and improve the local economy. As more manufacturers cite their plants in the country, the local economy will gradually transition to consumer economy from sole reliance on natural minerals such as oil, gold, and tin among others. Small business owners who import all their commodities from foreign countries must be encouraged to convince their parent manufacturers to set up plants in the country to avoid high national and local tax on the imported goods. Efforts must be made to attract big consumer businesses such as Procter and Gamble, Walmart, and big farming businesses among others to locate their businesses in developing countries. Most importantly, foreign farm businesses must be given special incentives to invest in farming and production of dairy products, grains, meat, fruits and vegetables by providing long term leasing of land (minimum of 100 years). Also, local farmers must be encouraged to transition from subsistence farming to mechanized farming by leasing mechanized equipment to the farmers at affordable fee either by big farmers or by farmer’s cooperative organization.  Over time, local farmers will grow to become big faming businesses that will help feed the country.

The goal of the consumer economy is to ensure that national revenue is not solely reliant on some natural mineral endowment such as oil as is the case in some African countries. With the shift to the alternative of the mineral resource, Black nations could still survive if there is stable consumer driven economy.

Reliance for national and local revenue on one or two natural mineral resource has inadvertently led to weak tax policies and little contribution of tax revenue to the underdeveloped nation’s economy. Individuals and businesses in most underdeveloped countries pay little or no tax for income earned and there are no consequences for tax evasion. While tax policies and enforcements are critical in consumer economy and needed in underdeveloped countries, tax laws and policies must be simple, low, and attractive to foreign and domestic investors. The tax policies in developing countries must target foreign investors willing to build infrastructures that create jobs and at the same time contribute to the building of social infrastructures needed in civilized environment.  Small business taxes must take into consideration income generated and jobs created and tax breaks provided as more jobs is created. Income generated could be monitored in a cashless economy and jobs created could be tracked once the employment is reported by the employer as mandated by the department of employment and productivity. The target for the underdeveloped black nations should be to generate enough revenue from consumer tax to pay for most public utilities such as public water resources, local roads, public schools and hospitals, public employee salaries/benefits, and elderly/disabled person’s benefits among others.

The revenue from natural mineral resources should be used as the nation’s capital project revenue and national reserve to help cushion any fluctuations in the revenue generated from consumer driven economy. In times of economic uncertainty and unexpected economic depression, the foreign reserve from such revenue will be critical to the protection of local economy in order to avoid economic hardship of the citizens. For countries that produce oil and gas, recent reduction in the demand for these goods is a case in point and an eye opener to the instability of revenues accruing from natural mineral resources. The states and local counties must develop their communities based on their development plan and on a competitive bases to attract more jobs, foreign investments, and national pride. Foreign investors should have the liberty to cite their businesses based on the most favorable state policies that enhances their growth, safety, and income.