In nations and in companies, leadership matters. The decisions leaders make have consequences. If as a CEO, I make a wrong decision, I personally and my company suffer the consequences in the marketplace – we fail. If a nation’s leader makes wrong decisions, the people pay the price – a tortured present, a lost future. Rarely are a country’s leaders held accountable for their actions. They may lose a few elections but can still be voted back (as India did with Indira Gandhi in 1980, five years after she had imposed Emergency). Economic outcomes take time to play out so only history can decide on their legacy. It is therefore even more important for a nation to get a right leader, and for the leader to get the big decisions right.
What can we learn from the leaders of successful and failed nations? According to me, there are five characteristics of good leaders:
- A determination to put economic growth and prosperity above everything else
- This needs an understanding of what creates prosperity – and what does not
- Then, getting the best talent to put in place the right policies for growth
- Doing it all with a sense of urgency
- And finally, communicating to people the import of the decisions and policies
The basics of lifting people out of poverty has been known for a long time. For agriculture-heavy countries, it means creating conditions that lets manufacturing flourish. This way, the poor people who engage in subsistence farming can work in factory jobs which pay much better. They create stuff that they and others can buy. This helps drive economic production and growth. As quality in production improves, the opportunity to export opens up.
This is what China did and it became the factory for the world. South Korea also pushed exports. Singapore educated its people and focused on trading and services. Each country charted its way out of poverty and into prosperity.
This did not happen automatically. The leaders had to create conditions for entrepreneurs and private enterprise to flourish. Education, economic freedom, rule of law, free markets, free trade, property rights – all had to be in place before prosperity touched the people. Mistakes made were corrected rapidly to ensure time was not lost on policies that did not create wealth. Wasteful welfare schemes were nowhere to be seen.
In each country, it needed one leader to set the cycle of growth and prosperity in motion. In India, fourteen Prime Ministers later, we are still waiting.
Tomorrow: Part 10