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Local Government Administration and the Challenges of Rural Development in Nigeria

Local Government Administration and the Challenges of Rural Development in Nigeria


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Home Page > Business > Leadership > Local Government Administration and the Challenges of Rural Development in Nigeria

Local Government Administration and the Challenges of Rural Development in Nigeria

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Posted: Mar 05, 2008 |Comments: 4
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Abstract

Rural development of the grassroots has been the concern of every responsible and responsive political system. This is because development and participation have continued to elude people of the grassroots. Development remains insignificant if it does not positively affect the lives of those in the periphery of decision making arrangement. The Nigerian state therefore created local government as the third tier of government whose objective is to ensure effective, measurable and efficient service delivery to the people. Local government is faced with various difficulties. The major concern of this paper is to dwell on these difficulties and illuminates the factors that are responsible for them. In achieving this, the paper relies on descriptive approach and unstructured interview. It concludes that problems of local government are multifarious in nature and the solutions for them should be adequate and practical in order to evolve viable and development-oriented third tier of government.

Key words: grassroots, political system, autonomy, third tier, participation, development, uniformity, unity, culture, diversity, interference, national integration, performance, consciousness, concept, commitment, democracy, inefficiency, corruption, decentralisation.

Introduction

The expediency for the creation of local government anywhere in the world stems from the need to facilitate development at the grassroots. The importance of local government is a function of its ability to generate sense of belongingness, safety and satisfaction among its populace. All forms of government, regimes or political systems have so far ensured the attainment of this goal. Such strategy for ensuring national administrative development and political efficacy is found in the concept and practice of local government. Whatever is the mode of government, local government has been essentially regarded as the path to, and guarantor of, national integration, administration and development.

In Nigeria’s socio-political context, with multiplicity of culture, diversity of languages and differentiated needs and means, the importance of such an organisation in fostering the needed national consciousness, unity and relative uniformity as well as preservation of peculiar diversities cannot be over-emphasised. Central to the creation of local government, however, is its ability to facilitate an avenue through which government and the people intermix, relate and more quickly than any other means resolve or dissolve issues that may have heated the system. Local government has been perceived as a panacea for the diverse problems of the diverse people with diverse culture.

As important as this tier of government has been, there seems to be some impediments that have been infringing on its performance and functions in recent times. These impediments range from political but undue interference of the higher levels of government i.e. federal and state governments, bribery and corruption to embezzlement and gross inadequacy of well-trained and qualified personnel to mention a few.

The Concept of Local Government

The concept of local government involves a philosophical commitment to democratic participation in the governing process at the grassroots level. This implies legal and administrative decentralisation of authority, power and personnel by a higher level of government to a community with a will of its own, performing specific functions as within the wider national framework. A local government is a government at the grassroots level of administration “meant for meeting peculiar grassroots need of the people (Agagu, 1997:18). It is defined as “government by the popularly elected bodies charged with administrative and executive duties in matters concerning the inhabitants of a particular district or place (Appadorai, 1975:287).

Looking at the existence, performance and relevance of local government, Laski (1982:411) opines that:

we cannot realise the full benefit of democratic government

unless we begin by the admission that all problems are not

central problems, and that the result of problems not central

in their incidence requires decision at the place, and by the

person, where and whom the incidence is most deeply felt

Local government can also be defined as that tier of government closest to the people, “which is vested with certain powers to exercise control over the affairs of people in its domain” (Lawal,2000:60). A local government is expected to play the role of promoting the democratic ideals of a society and co-ordinating development programme at the local level. It is also expected to serve as the basis of socio-economic development in the locality.

Observations have shown that local government in Nigeria has not performed to expectation. Keen observers have since adduced various propositions for explaining the reasons why the system has recorded abysmal level of inefficiency and ineffectiveness vis-à-vis justification for its establishment. But before reading into the problems of local government, we shall first attempt to illuminate the historical background of local government in order to have adequate grasp of its future and achieve deeper understanding of salient issues raised in this paper.

Brief Historical Background of Local government System in Nigeria

Regardless of nomenclature, local government is a creation of British colonial rule in Nigeria. It has overtime experienced change in name, structure and composition. Between 1930s and 1940s, for instance, local government was known as chief-in-council and chief-and-council, where traditional rulers were given pride of place in the scheme of things. In the 1950s, election was introduced according to the British model in the western and eastern parts of the country with some measure of autonomy in personnel, financial and general administration (Nwabueze, 1982:20-21). It was on this premise that the rising tide of progress, growth and development experienced in the local governments in these areas was based. The pace of this development was more noticeable in the south than in the north.

During this period, heterogeneity was the hallmark of local government as there was no uniformity in the system and the level of development was also remarkably different. The introduction of 1976 reforms by military administration of General Obasanjo brought about uniformity in the administrative structure of the system. The reforms introduced a multi-purpose single-tier local government system (Ajayi, 2000:70)

The reforms also introduced population criterion under which a local government could be created. Consequently, a population of within 150,000 to 800,000 was considered feasible for a local government. This was done to avoid the creation of non-viable local council and for easy accessibility. There was provision for elective positions having the chairmen as executive head of local government with supervisory councillors constituting the cabinet. This was complemented by the bureaucrats and professionals, such as Doctors, Engineers, etc., who were charged with the responsibility of implementing policies (1976 Guidelines).

In 1991, a major landmark reform was introduced as the system had legislative arm. In addition, the Babangida administration increased the number of local government from 301 in 1976 to 453 in 1989 and 589 in 1991. the Abacha regime also increased the number to 774 local councils that we have today and the administrative structure also underwent some changes (Ajayi, 2000:71).

In summary, it can be said that no public institution in Nigeria has been so subjected to frequent reforms than local government. Nearly every successive administration introduces one administrative change or the other. Apart from the celebrated 1976 reforms, state government officials have also introduced various manipulations. For instance, in Ekiti state, the tenure of elected local government officials was reduced to two years. While some retained it to reflect three years. In the southwest, except for Lagos, a caretaker committee was introduced in 2003 immediately after the general elections. In similar vein, in June 2007, some state governments dissolved their local councils and appointed caretaker committee to steer the affairs of the council prior the conduct of elections.

It is germane to note here that these changes were not without resultant effects. Some of these changes met with social strife. For instance in 1997, the relocation of some local government headquarters was marked with large scale destruction of lives and property in Ondo, Osun, Delta, Rivers and Cross-River States (Omotosho, 1998:94-105). Specifically in Ondo State, the relocation of the then newly created Akoko South East local government headquarters from Oba Akoko to Isua Akoko was met with destruction of lives and property. In 1998, Abubakar administration introduced sole administrator system at the grassroots level before elections were conducted in December 1998 for the posts of chairmen and councillors. Also the dissolution of local councils in Ekiti State by the new administration of Governor Segun Oni in June 2007 generated furore between the local council’s chairmen and the governor.

In essence, it has become almost fashionable in Nigeria for incumbent administration to introduce one change or the other in the institution. So far, local government system in Nigeria has not been stable and this leaves its future to remain bleak, uncertain and insecure.

Problems of Local Governments in Nigeria

Despite the justification for the establishment of local government and its inevitable importance to the people at the grassroots level, this tier of government seems not to have justified the reasons for which it was established. The questions that summarily come to one’s mind are: why has local government not lived up to its expectations? What are the causes of these seemingly conspicuous weaknesses? What are the challenges of the local government? And how can these weaknesses be corrected and the challenges met?

The problems of local government are multifarious in nature and it is the concern of this paper to explain them in details. These problems include:

Finance

Despite the increase in the total amount of funds available to local government in Nigeria since early 1990s, its economic and financial profile is still very poor, relative to the development programme it is expected to carry out. This situation is not unconnected to the mismanagement and embezzlement of these funds by the local councils.

Inadequacy of Skilled Workers

Save for some few local councils in Lagos states and, perhaps, some southern states, local government generally has experienced and is still experiencing dearth of skilled, technical and professional staff like qualified engineers (of all types), medical doctors, accountants, statisticians, economists, lawyers, town planners, to mention a few. The facilitating factors for this include:

? Low image of local government in the mind of professionals who feel and think that there is no job satisfaction sufficient to keep them at that low level of public service.

? Hopeless nature of the job attributable to, and arising from, low or no incentives for junior workers, no chances for creativity and innovation as well as perpetual delay in payment of salary.

? Recently and more importantly, threat and fear of retrenchment of junior workers has derailed their psychological balance and affected their efficiency and output. This is fashionable in Ondo and Ekiti states where series of staff audit were being carried out just for the purpose of downsizing to reduce wage bill as a result of the demand for and payment of fifteen percent increase in salary.

? Manner of recruitment is questionable as it is based on subjectivity and consideration of sentiment. Employment was based on favouritism, nepotism, ethnic and political consideration and other primordial factors that replaced and displaced competence, qualification, experience and performance.

Problems of Participation and Involvement

For the past decades, more euphemistic phrases have since been employed to justify people’s participation at the grassroots. They include: “Development from Below”, “Bottom-up Approach to Development”, “Popular Participation”, Bringing Government Closer to the People” and other catchphrase to argue for people’s involvement the affairs that directly affect them (Lawal, 2000:66). From all indications and convictions, research and physical observations have shown that there has been more hue and cry than action. Local government prepares estimates for its revenue and expenditure without proper recourse to, and due consultation with, the people for whom the exercise is being carried out to know their needs, their problems and potentials. A number of factors are responsible for non-involvement of people in their own affairs. These include:

? Loss of interests in the project that will not benefit the chairmen and their cohorts.

? The age-long belief by the officials that people are ignorant, illiterate and unenlightened.

? Lack of political will by the leadership to run an open administration due again to selfish interest.

? Poverty of socio-political philosophy for change.

Misplaced Priority

Hard-earned and limited resources accrued to and raised by local government are always mismanaged. Priorities are misplaced; projects are done not according to or as demanded by the people but regrettably in tune with the selfish end and aggrandisement of the political leadership in collaboration with the senior bureaucrats at the local government level of administration.

Coupled with this is the greatest bane of development in the Nigerian public service in general and local government in particular which corruption is. Reports of probe panels at the three tiers of government have revealed the culpability of civil servants. Corruption in low and high places, corruption has been rampant among the senior civil bureaucrats to whom the public funds meant for developmental purposes are entrusted.

Generally, wide-scale embezzlement by officials of the grassroots has made the needed development of the grassroots a tall dream and has rendered them financially incapable to discharge their constitutionally assigned responsibilities.

General Indiscipline

Indiscipline is rampantly perceived and well pronounced among the workers in third tier of government. The senior officers who travel to their families away from their offices on Friday return very late the following Monday or may decide to stay back till Tuesday; and the junior members of staff who directly or indirectly observe this more often than not are in the habit of playing truant with their jobs. Little or no commitment to duty has become a rule rather than an exception.

Offices have been turned to marketplaces where officers hawk their goods freely. The rules that guide moral conduct and professional ethics seem to have, at worse, become cobweb that is so weak to tame the monstrous activities of the workers.

Indiscriminate lustful desires are noticeable among the workers. The official’s relationship between super ordinates and subordinates has been stained. Strict instructions handed down from top echelon to the bottom are either not followed or treated with levity as a result of the immoral relationship between the boss and subordinates. Official duties are seen as an extension of private leisure. Laissez-faire attitude to work has arrested the efficiency of local government and has drastically affected its performance.

Undue Interference

The degree of external influence and intrusion in local government affairs by the higher levels of government is worrisome and needs re-evaluation. Situation where the state governor unconstitutionally dissolves the entire elected council’s officers without proper investigations on spurious allegations is not good for the future of local government administration in the country. Such external interference indeed subverts democratic process and undermines constitutional authority at the grassroots level.

The crux of the matter is the ‘almighty’ power and misuse of it enjoyed by the state governments over local governments. Practically, and in true sense, local government in Nigeria lacks autonomous financial power. Local government is now considered as an extension of state’s ministry. The inherent nature of this problem has caused subservience, a situation where local government waits for the next directives from state government before the former could think of, let alone embarking on developmental projects. This has made local government an object of control and directives.

The major challenge that local government faces is the political control the respective state governor has on the local government chairmen. This is as a result of the fact that state governor sponsors election of most, if not all, of the chairmen. They are handpicked by the state governor rather than being elected. It is a clear case of who pays the piper dictates the tune. This again creates a problem of diversion of local government funds for personal use of state governor.

In Ondo state, for instance, there is this unholy alliance between state government and local councils in the state, where the state government constitutes Joint Action Committee, tagged ‘JAC’. Federal allocations to local government are first deposited into a particular ad hoc account before calling for the committee meeting. This in a way paves the way for the state government to plan for the local government and release the money in instalments. The motive behind this is to divert the money to another thing entirely which does not have impact on the lives of the rural dwellers but that will be beneficial to the state governor. Another thing is the interest that the money will generate in the bank. The implication of this is that few of the local government chairmen who have genuine intentions and are ready to perform are being discouraged. This again assigns more power and control to the state governor. The overall effect of this is the negative impact it has on the people of the grassroots as they are getting more and more alienated from developments. Also illustrative and instructive is the arrest and prosecution by the Economic and Financial Crimes Commission (EFCC) of the former Enugu State Governor, Chimaroke Nnamani, on the allegation of diverting local governments’ funds in the state. This shows the level of influence and control that state governors have over local governments in their respective states.

This undue interference has incapacitated local government from effective functioning on the one hand, and alienated grassroots people from enjoying social services delivery expected of local government on the other.

Conclusion

This paper examines the historical background of local government as well as the challenges it faces. While evaluating the problems of local councils in Nigeria, emphasis was placed on general indiscipline among the workers and high level of corruption in this level of government among other things.

The paper argues however that the creation of local government in most cases was not based on viability and developmental purposes as required by the constitution but on administrative conveniences, connections and contracts to score cheap political goals and to achieve legitimacy and enhance regime sustenance especially by the military rulers since most, if not all, of these creations were done by the military.

The resultant effect of this is that some of the local governments end up in financial crisis and are unable to tackle the challenges of services delivery and mobilisation of both human and material resources required for the functioning and meaningful development of the local government areas. In some parts of the country, local governments are considered as avenues for sharing their proportion of ‘national cake’. It is a ‘sharing point’ for some, while for others, it is a private property. As a consequence therefore, underdevelopments continue to wage on as people are either ignorant of or indifferent to the reasons for which local governments are created.

Also worrisome is the undue interference from other two levels of government. This essentially makes this level of government to have crisis of recognition and autonomy problems. The question here is: is local government the truly third tier of government or a ministry under its respective state government?

While we know that the basic rationale behind the creation of local government is to meet the peculiar needs of the people at the grassroots, it is however pathetic to note that local government has demonstrated incompetence in this regard. It is therefore desirable to suggest ways through which local government could come out from this inertia and stagnation.

Recommendations

The suggestions of this paper are based purely on experience and direct observations and are therefore practical and problem-solving. These include:

Economic Base

The major purpose of creating local government is to bring developments to the grassroots. In order to perform this adequately, there is need for local councils to have strong economic base. In this connection, it is suggested that statutory allocations to local councils be reviewed upward.

In addition to that, councils’ shares of the federation account to be released to them directly to avoid lateness in the payment of salaries and arbitrary deductions by state government. Local government should have representation in the Revenue Allocation and Fiscal Commission, which determines and shares the federated revenue to the beneficiaries. It is not enough to have an upward review of councils’ allocations, but also advisable for local councils to look inwards for improved Internally Generated Revenue (IGR). This will make them financially self-reliant. Besides, some local councils should look for ways of attracting industries to their areas as this will propel economic development and increase their revenue base.

The section 7 of the 1999 constitution that places local government under state government has made the former to be a mere appendage to the latter. For instance, the Ondo State House of Assembly recently passed a bill which seeks to amend the laws establishing local councils in the state. The implication of this is that, intermittent reforms and undue interference do not make local councils stable tier of government. The fear of uncertainty could cause apathy and inconsistence in policy and ideologies. It is however appropriate to suggest that the National Assembly should be the creating authority of local government as this will rightly place local government as the third tier of government with full direction and control over their respective localities.

Better Welfare Package for Staff

Workers in any organisation are the ones that make things happen and as such they occupy important position in production process. This is because they put life into raw materials and change its form to satisfy human wants. In consideration of this therefore, workers in local councils should be adequately motivated in order to prepare them for the task of service delivery.

Finally, the electorate should be educated and enlightened of the danger inherent in money politics, they should endeavour to vote for people of proven integrity rather than compromising their future and that of generation yet unborn on the altar of election.

It is the belief of this paper that strict observance to these suggestions can lift local councils from their relegated position of tools of manipulation to the aspired status of instrument of change and development at the grassroots level.

References

Ajayi, K (2000) Theory and Practice of Local Government. Ado Ekiti, UNAD

Agagu, A.A. (1997) “Local Government” in Kolawole, D. (ed) Readings in Political

Science, Ibadan, Dekaal.

Appadorai, A. (1975) The Substance of Politics. New Delhi, Oxford University Press.

Laski, H.J. (1982) A Grammar of Politics. London, Allen and Unwin.

Lawal, S. (2000) “Local Government Administration in Nigeria: A Practical Approach”

In Ajayi, K (ed) Theory and Practice of Local Government, Ado Ekiti, UNAD

Nwabueze, B.O. (1982) A Constitutional History of Nigeria. London, Longman.

Omotosho, F. (1998) “Electoral Politics under the Abacha Regime” in Kolawole, D. and

Mimiko, N.O. (eds) Political Democratisation and Deregulation in Nigeria under the Abacha Administration: 1993-1998. Ado Ekiti, UNAD

The 1976 Local Government Reforms guidelines, Lagos, Federal Ministry of Information

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I hold B.Sc in political Science and M.Sc in Public Administration from the University of Ibadan, Nigeria.

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Local Government Administration and the Challenges of Rural Development in Nigeria

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4. david prince 13/06/2010

how does feasibility business enrol in local government area

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3. Chabubo Ngwira Mzuma 23/03/2010

Alot of Third World Countries are having problems with Decentralization (taking Development to the owners who are the grassroots) because in of the way it is forced on them by Donor Communities.When the Donors wants to create jobs for their Nationals, they always find an opportunity where they can post them hence such hesity formation of NGOs just to forster their own will.My plea is for them to be consulting first before coming up with any new idea otherwise they are giving us thing we do not understand late alone know hence difficult to implement.

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2. chinonye nwosu 28/10/2009

tress the history of development adminstration

3

1. victor 21/04/2009

i want to known more about local government administration

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I hold B.Sc in political Science and M.Sc in Public Administration from the University of Ibadan, Nigeria.

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Crisis in World Economy and the Proposed New Model for Sustainable Development

Crisis in World Economy and the proposed New Model for sustainable development.

The ongoing turmoil in world economy raised the doubt that present model of capitalism cannot be sustained for environmental and social reasons. Respected thinkers and scientists have pointed to this reality. Now we should look ahead to a new system that is sustainable and humane. Otherwise whatever wealth is created would be wiped out by environmental disasters and social upheavals. Whole system is complicated by lack of transparency. It is not clear where all the money gets invested. Hedge funds are cloaked in secrecy- even bailout money has disappeared with no effect to the economy. Even now nobody knows which are the real bad toxic assets, so stock market is also not recovering.

In this treatise some key issues in this crisis are discussed and a new  model is proposed that will engineer a balanced global society  globally conscious, active and sustainable.   

Regarding overpaid CEOs

Let us ponder over some news those captured the attention across the globe. Washington Mutual Chief Executive Alan Fishman could walk away with more than 18 million dollar in salary, bonuses and severance after less than three weeks on the job as golden parachute from flight WaMu in danger, according to the terms of his employment agreement. Lehman Brothers was handing out 23 million dollar to three executives just days before it collapsed. It paid 2.5 BILLION dollar bonus fund after failing. CEO of American Express saw his pay go up much more than double although shares price nosedived. Hewlett Packard CEO destroyed half the wealth of her investors and yet still earned almost 100 million dollars in total payments. Exactly same is the case with Informix Software CEO. The list goes on and on. It means what?  This isn’t a diatribe against CEO pay. Point is failure has become a recipe for financial success of CEOs especially in America by virtue of their intelligent manipulation and abuse of power.  Martin Whitman, economist and the great advocate of capitalism opined that apart from corruption another reason as to why a free market situation is probably doomed to failure is very exorbitant levels of executive compensation.

 Regarding free-market economy

I do not think free market is really free. Those who say they favor a free market are speaking in a relative term.  In an absolutely free-market economy, all capital, goods, services, and money flow are unregulated by the government. There is simply no free market yet, given the degree of state intervention in even the most capitalist of countries. For example US government took an 80% stake in AIG in return for an 85 billion dollar investment to save the company. Recent news of Citi bank is being given a bail out package of 326 billion dollars and Jaguar’s requirement of 1 billion pound for sustaining economic meltdown are significant. Under pure capitalist theory, none of these actions should’ve been taken; the government should have stood by idly while the economy tanked. So how can a free market be free if it’s regulated?  The fall out of free market economy such as black Market, underground economy, Drug trade essentially justifies government’s intervention to remedy the situation and establishes the argument against free market as an impractical ideal that engenders vested wealthy interests. Experiments in absolute adherence to free market principles evince signal failures in Military, Road, Health Care, Civic Amenities, Education, R & D etc. Free- market economy is a fantasy – outside of the bounds of reality in a complex system with opposing interests and different distributions of wealth. Time and again world is realizing this fact is a harder way. Hence I align with those critics who are in favour of a planned economy  as advocated by socialism and who associate markets with greed  as the basis of capitalism. I believe it is inherently immoral. More over one practical objection is that free market economy does not take into account the externalities i.e. effects of transactions that affect third parties, such as the negative effects of Global Warming that brought world to Apocalypse in foreseeable future. I guess that in well-run industrial economies like Japan, Singapore and China, there is marriage between government and the private sector, each benefiting from the other. Any temporary prosperity on an extremely austere free market concept can crumble like a pack of cards, like it happened in USA.

Regarding Nationalisation and regulation.

 What does the US federal government taking control of financially crumbling mortgage holders Fannie Mae and Freddie Mac with a bail out package of staggering 800 billion?  Why on the earth Fed and other regulators are coming into the picture particularly for some of those that got overextended with the subprime and other kind of mortgage debt? Nationalization occurs when full or partial control is taken of private financial institutions, usually to avert a crisis. Scandinavian nations successfully averted an economic meltdown through nationalization in the early 1990s, and in recent times. US government is taking similar actions. It looked at the global fallouts and how politically they will be viewed by the world powers. So they bailed out finance industries, but not agreeing so easily to the auto industry. these issues are interlinked with power, military, oil.

 Regarding mortgage financing

It was the proponents of Capitalism who supported advantage of loan facilities and low interest rates for houses to be owned by people at low income group. There was enormous marketing effort to dupe people into it.  Logic was simple. If one buys house, he will also buy complimentary household goods like furniture, Fans, AC, Cars etc. creating a demand pull in the economy. Banks also extended the moratorium on interest and principle up to 5 years to convince the borrowers. When crisis occurs, should we brand common people as “lazy bummers”? Similarly it is unfair to blame the common investors for lost speculative fortune when Stock Market is institutionalized by system as a socially and ethically valid means of income.

Regarding targeting CEOs

In our capitalist system, you’re free to earn what you can, and what the market will bear- this logic does not hold water since big companies are increasingly depending on public money for a bail out. Hence I support newest trend of shareholders in raising questions and putting pressure on boards and compensation committees to make sure compensation is fair but not excessive. The interesting News was that US Law Makers asked blunt questions to CEOs like Wagoner, Nardelli, Mulally of GM, Chrysler and Ford who came to the Capital Hill with a begging bowl for 25 Billion of Tax Payers money, when each one of them preferred to fly in their individual Private Jets, when as many as 24 non stop flights fly daily from Detroit to Washington. Lifestyle and salary should definitely be a valid question when companies are using public money. That is why companies are facing “say on pay” resolutions from shareholders. The board of directors should have taken this role, but instead they normally abdicate it. Most CEOs considers keeping board members happy as their primary duties. For example taking the board members on an all-expenses paid trip to a five-star international resort, allowing his compensation to spiral out of control, which is nothing but intelligent corruption and abuse of power.

Myth regarding the CEOs’ ‘sheer value-add’ in the corporate world.

For a company to become successful entails billions of variables, which are oftentimes beyond the ambit of human ability of one individual. Even with our full regard on Narayanmurthy’s ability, we must accept Infosis’s success was primarily on account of flattening effect of world by Internet revolution in 92.  Jerry Yang, co founder of Yahoo, considered to be a great CEO, had to step down amid mounting pressure from investors after he botched takeover talks with Microsoft Corp. and failed to broker an online advertising agreement with Google Inc. Many CEOs were rated highly for certain techno bubble, which turned out to be utterly divorced from any business purpose whatsoever. Of course there is positive effect too- it attracts lot of investment and accelerates the pace of innovation. The trophy cases of HP CEO with so many industry awards and accolades were crucified for her destructive reign of terror with “Silicon Valley greed.” Hence it is fundamentally wrong to empower one individual so much for the success and failure of an organization. In Japanese and Chinese model, system is ascribed more powerful than an individual.  Once CEOs become all-powerful, their executive staff is reluctant to challenge them. Instead, the natural tendency is for these dominant leaders to become cocooned from reality. They are told only what they want to hear and hear only what they want to be told. Sequestered from the rest of the company, they lose the pulse of the business eventually.

Regarding Capitalism vs. Socialism

By virtue of the extremely clever indoctrination, a spin-off of media advertising especially of US kind, our thought process is getting clouded driving us towards more personal interest, freedom and power than social responsibility. Do we really need large waves of money sloshing daily around the planet for benefit of only a few, waves often generated by speculation capable of dislocating economies? Do we need larger and larger corporations which concentrate economic power into fewer and fewer hands? When seen in this light, capitalism has a shadow side. Economy in its root sense means acquiring the basic material things we need to lead a human life: food, shelter, energy, etc. But this is something quite different than a quest for a so-called higher standard of living. This really is the unending quest for a higher level of consumption. Our material needs are finite. After a certain point we are simply embellishing them. Then we begin to distort them making them the carriers of our own disordered desires.  Recent news of bra and panty for men in Japan is the right example for such disorder. We need shelter but we don’t need 50,000 square feet trophy homes when billions of people can’t even afford a shanty. Now we are living in a time when we don’t even feel shame. We have become so much closeted within ourselves that even with the back up of enormous fortune, we feel unsafe with the slightest possibility of economic meltdown.  Capitalism propels us to become shameless consumers and run our lives according to the design of the contemporary social machine, which foreshadows world destruction, whereas our true nature favours a life closer to nature. If American Capitalism is a kind of religion with its own dogma, then its God is Money and its driving force is Greed.  The fall out of this ruthless system is obscenities of unemployment, homelessness and economic insecurity and hence is not sustainable in its present form. The whole system is designed to make fewer and fewer people richer and richer at the cost of resources of the multitude. It definitely operates below the level of consciousness and no longer works for us.  I understand one very simple thing – goods and services generated in an economy must be shared equitably in a population. Otherwise those who will be deprived will take resort to unethical or socially unacceptable means- theft, dacoity, terrorism, drug, killing, cheating, narrow politics and what not.   Recent examples of everyday terrorism, Piracy, Mao attacks, dark killing are the pointers to this fact.   

Even in USA people are facing dark side of capitalism when blue collar Americans have been losing jobs because of outsourcing and off shoring in the mask of progress for real intention of more profit.  What is the social damage? Skills for manufacturing a certain product developed over the years are getting lost in the society.  Capitalist countries use capitalist ideals as a matter of convenience.  When Government owns hospitals, libraries, transportation systems, utilities, army, Navy, Air Force, forests and national perks- yet, who would call these institutions examples of socialism?  Socialism means a government in which the people collectively own and democratically operate the industries and social services through an economic democracy by ending the waste, duplication and inefficiency of capitalist industries. Under capitalism the industries operate for one purpose – profit maximization. As per Capitalism profit is also a cost, cost of staying in the business. Under Socialism goods are produced for use and to satisfy the needs of all the people. Under this system everyone could live comfortably with no giant gaps between rich and poor. Is it not really humane? Just because a system is not strictly as per lower merits of human nature say greed, it should not be rejected. Socialism talks about higher sense of our human values and existence.  After Industrial resolution act 1956 in India, socialistic pattern of economy in India has produced wonderful developments in sectors till seventies. Hence we can infer that Socialistic system can produce wonderful results under certain conditions and social environment.  However I do agree classical form of Socialism may not take into account of the Individual brilliance and creative pursuit, which is probably its one of its weaknesses.

The New Model

Having said this, we should find out whether there can be a balance between the two systems and what kind of mechanism society should develop so that one can approximate the ideals of good life in his individual life and in the life of community of which he is a member. I feel it is possible to have our modern global economy while being socially, culturally & environmentally responsible at the same time. Society has go through a difficult paradigm shift in personal values, which will instill a degree of awareness in our mind as opposed to the blind, materialistic way we are living.

I have thought of one model that will engineer a balanced global society that is globally conscious, active and sustainable. Way out is to lead humanity by the collective wisdom of most talented people in a society or country- a kind of meritocracy.  Mechanism to harness collective wisdom will be -say for any policy and contentious issue, opinions of most eminent people of the country will be  collected by a network of computers and looking into the wisdom of eminent people who are most knowledgeable on the subject under consideration, decision can be made in real time. Their services can be hired at a cost; they can be selected based on the track record etc. Decisions can be taken in National forum if discussion and debate are warranted. Experiments, research and its implications can be interpreted by eminent people only and that is why collective wisdom as instrumentality for decision support system may be a model worth trying for. One may argue country does not need only dry knowledge culled from books. There must be leaders to make certain things happen. Yes leaders are required. But a leader can be chosen by collective wisdom, which should be supremely empowered. A leader will resort to collective wisdom for at least for major decision. The collective wisdom is likely to veer country to right direction. Humanity has to go though different experiments and whatever evolved as better model will be accepted and perfected in course of time. We should never be blind to state that capitalism or the socialism is the right system with dogmatic finality.

The author is a senior executive in Hindustan Aeronautics Limited and lives in Kolkata with his wife and daughter. He is a Mechanical Engineer with Masters degree in Business management and has 22 years’ of experience in cutting edge technolgies in different companies in India and abroad.