This is the right economist for Gigaba

Our new finance minister, Malusi Gigaba, is far from home this weekend. He is in New York, heading for Boston tomorrow, after meeting World Bank and International Monetary Fund officials in Washington on Friday.

Whatever you feel about Gigaba and the way he came into the job two weeks ago, it would be churlish not to wish him well.

Unlike other exotic finance ministers President Jacob Zuma might have flirted with, Gigaba gets the gravity of our situation following Pravin Gordhan's sacking, Zuma's apparent conversion to land grabs, and the downgrading of our sovereign and foreign debt.

story_article_left1

But merely understanding the problem doesn't always solve it. Gigaba's investor roadshow in the US will drive that home. Big money in America is as cold as ice, but Gigaba will also discover how many friends South Africa has in the West and, hopefully, the message he carries will keep them onside. Boston, where he arrives tomorrow, oozes power, wealth and intellect. It is home to 35 universities and colleges.

I was there last week, privileged again to watch my favourite economist, Ricardo Hausmann, put his talent for congregation to work. He runs the Center for International Development in the Kennedy School of Government at Harvard. I think he's the best development economist in the world. People flock to seminars at his centre. Gigaba should ensure that all his top people at the Treasury spend time with this guy and his team.

The issue was "us" and "them". What keeps people apart? And is it even a fact that something does? Hausmann flashes up a map of Europe 700 years ago. It consists of more than 50 states and principalities that somehow end up being Germany, Italy and France. So perhaps our natural inclination as a species is to co-operate? Europeans went to war with each other twice last century. Then they made the EU.

You sit there listening and think about home. How do we get it right here, after so much damage? Speakers agree it's not all plain sailing. "There will be losers," says Robert Wright, author of The Moral Animal. Gulp ...

What Hausmann really wants to ask is why some economies succeed and others fail. The centre has developed an interactive map of industrial development and complexity for almost every country on earth and on it you can literally watch, over time, the successes and failures occurring. Check it out at atlas.cid.harvard.edu.

After listening to him and reading him for years, I think I get it. Prosperity is about complexity: lots of people who know how to do different things co-operating. So, how do you make a small economy a big one? How do you create jobs? The answer isn't necessarily pretty.

A few years ago I watched him lecture. He used his map to compare Ghana and Thailand. In 1963 their economies were the same size. The Ghanaians grew and harvested cocoa better than anyone else on earth. The Thais grew rice and made some textiles but didn't speak English. Today the Thai economy is way bigger than Ghana's.

story_article_right2

And you could see it on the map. The Thais manufacture thousands of sophisticated products today. The Ghanaians are still really good at cocoa. What the Thais did that the Ghanaians didn't, was to invite foreign manufacturers to come and make their products in Thailand and export them from there. That immigration of knowledge created the complexity that in turn triggered a generation of Thai industrialists and entrepreneurs.

But knowledge travels only with people. It's why migration matters. You can't teach experience. You can't tell someone down the phone how to make a computer chip. If we seriously want to reindustrialise our economy we have to import the people who already have the products and experience. Make it easy and attractive for them to use our country as the place to do their business in. The spin-off is beyond measure.

But, politically, it's tough. No one ever got elected for bringing more foreigners into the country. We make it especially difficult for foreigners to start big businesses here. We don't compete. We create hurdles for them to jump. Why?

What we need, and perhaps especially in a finance minister, is the ability to learn from best practice. Let's stop theorising. What works? Find that out and then let's just do it. The great universities of the world are where knowledge and experience are stored and repeated. And we are, if we are serious about our future, welcome to it all.