The African Roadmap Series Part II – By Eyob Zerihun

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Ensuring sustainable development

The term sustainable development is often misunderstood and some in the past have criticized it as being too vague.

“I know that this term is obligatory, but I find it also absurd, or rather so vague that says nothing.” Philosopher Luc Ferry

“The term is more charming than meaningful.” Philosopher Luc Ferry

The fact that this is a continuously evolving complex area that touches upon many interdisciplinary subjects makes it difficult to define. The United Nations Brundtland Report released in 1987 defined sustainable development as “development which meets the needs of the present without compromising the ability of future generations to meet their own needs.” Basically this first attempt to define sustainable development focuses on the interlinkages between economic development, environmental degradation and population pressure. Since then the idea on sustainability has been evolving. The United Nations 2005 World Summit Outcome Document defines the concept of sustainable development as “interdependent and mutually reinforcing pillars” of economic development, socio-political development, and environmental development. The concept revolves on the relationship of these three pillars. Accordingly sustainable development should be socially and environmentally bearable, economically and environmentally viable and socially and economically equitable. There are indigenous peoples who are arguing through various international forums on the need to add a fourth pillar to sustainable development; cultural diversity. UNESCO’s “The Universal Declaration on Cultural Diversity” of 2001 further elaborates this concept by stating that “cultural diversity is as necessary for humankind as biodiversity is for nature”. It states that “culture is one of the roots of development understood not simply in terms of economic growth, but also as a means to achieve a more satisfactory intellectual, emotional, moral and spiritual existence”. Cultural diversity has quickly become another policy area of sustainable development.

Sustainable development is about managing economic, social and natural capitals. The general idea is about attaining continuous growth in a manner that protects resources, society and the environment although this sounds a bit paradoxical. Can development in one of these three areas be achieved without any significant impact on the others? Can progress be made on all three pillars in development projects?

The emphasis within the scope of sustainability itself cannot be the same in developed and developing countries. To be more specific for instance, the urging need of developing countries and their priorities are more leaned towards economic development and the priorities of those developed may be on social and environmental sustainability. So we should not expect all countries to have similar approaches and similar priorities on all three pillars of sustainable development even though these three are highly interrelated. Numerous books are written on the subject of sustainable development and most of them do not address Africa’s special needs.

John Baden, chairman of the Foundation for Research on Economics and the Environment, writes: “In economy as in ecology, the interdependence rule applies, isolated actions are impossible.” In reality, economic growth cannot be achieved without having any impact on society and the environment; the environment cannot be entirely protected without having any kind of impact on the economy and society; and there is no social development without any effect on the economy and the environment. Sustainable development is a concept with breadth and multiple dimensions that can be a maze of both complexity and contradiction.

Measurability is another controversial aspect of sustainable development. There is no one single indicator that measures sustainability. Joy E. Hecht in his paper: Can Indicators and Accounts Really Measure Sustainability? Consideration for the U.S. Environmental Protection Agency, underlined that measurability in sustainable development remained a challenge. He writes: “While much discussion and effort has gone into sustainability indicators, none of the resulting systems clearly tells us whether our society is sustainable. At best they can tell us that we are heading in the wrong direction, or that our current activities are not sustainable. More often they simply draw our attention to the existence of problems, doing little to tell us the origin of those problems and nothing to tell us how to solve them.” Others assume that the only way to make sustainability tangible is to have a set of well defined and harmonised indicators. And suggest that indicators should be identified and adjusted through empirical observations. Again it is essential to have a clear-cut understanding of the African context and take it into consideration in this practice.

The United Nations Economic Commission for Africa (UNECA) launched the first Sustainable Development Report on Africa (SDRA) in the 2004 – 2005 biennium. The SDRA is intended to help as a medium for assessing and monitoring sustainable development in Africa and among other things it is meant to promote a balanced integration of the three pillars of sustainable development which are economic, social and environmental. The second issue, SDRA-2 theme’s was Five-Years Review the Implementation of the World Summit on Sustainable Development (WSSD+5). The objective of this report was to provide the reader with an overview of Africa’s advancement in its implementation of the sustainable development agenda and to prompt action on the part of the various stakeholders, including governments, civil society, private sector and development partners, with the goal of accelerating progress towards meeting the continent’s sustainable development goals. The report touches on different thematic areas and reveals key findings including the challenges and constraints experienced during the implementation. The different aspects of sustainable development are covered in the report, even though all the relevant issues are not discussed in an exhaustive manner. That was not the goal of this report. However it provides pertinent information on the different aspects of sustainable development. The different thematic areas assessed in the report are sustainable development governance which includes peace, security and human rights; poverty eradication and socially sustainable development; sustainable consumption and production; natural resource base of economic and social development; the means of implementation and harnessing the interlinkages. Many key and relevant issues are covered under this report.

This kind of structured report and analytical work will help analyse the gap between the goals set and what’s actually achieved, hence allowing continuous improvement to be made in institutions and to policies and strategies to ensure sustainability. The three strategic pillars mentioned above are highly interrelated. The importance of having a contextually balanced and conscience approach cannot be stressed enough. In depth awareness of the African context of sustainable development is also vital.

According to the SDRA, the challenges faced in some countries on the continent and in some particular areas are constraints in the area of data collection. The report repeatedly underlined the need to strengthen the statistical capacity of countries to collect data that is essential for analysis and monitoring the progresses made.

African leaders committed themselves to NEPADs programme, and the results agenda of the MDGs, the Poverty Reduction Strategy Papers (PRSPs) including other national and sectoral development plans. The NEPAD initiative and results agenda require the use of better statistics to have clear systematic measures and reports on the achievements of outputs, outcomes and impact of development policies. The African Centre for Statistics (ACS) is a division in the United Nations Economic Commission for Africa. Among its mandate, is the responsibility to building statistical capacity and support member States, sub regional and regional organizations in the production of quality statistics. The Reference Regional Strategic Framework (RRSF) was developed to help build the capacity of national statistical offices in Africa after the UNECA repositioned itself in 2006. Since then the UNECA and its ACS division have been providing guidance to African countries on how to improve their statistics and increase their use in the critical areas of policy and decision making. Though many countries took advantage of such supports and made a dramatic improvement over the past five years, very limited progresses were made in some countries. The collection of data unique to sustainability, should also be given due attention. Countries should base their analysis and decisions on quality data.

The concept of sustainability has been vigorously challenged and still raises criticism at different levels. A number of intellectuals fiercely oppose it, arguing that the concept only helps the capitalists and some question the motive and purpose of sustainability. And others commented on the population control agenda that they believe to be at the root of this concept.

“Sustainable development is a policy approach that has gained quite a lot of popularity in recent years, especially in international circles. By attaching a specific interpretation to sustainability, population control policies have become the overriding approach to development, thus becoming the primary tool used to “promote” economic development in developing countries and to protect the environment.” Maria Sophia Aguirre

Some argue that the real purpose of sustainable development is to contain and limit economic development in developing countries, and in so doing control population growth. Joan Veon, a businesswoman and international reporter, posits that:

“Sustainable development has continued to evolve as that of protecting the world’s resources while its true agenda is to control the world’s resources. It should be noted that Agenda 21 sets up the global infrastructure needed to manage, count, and control all of the world’s assets.”

The other dispute comes from single focus groups such as environmental and human right activists. These single focus groups are merely concerned about one or two pillars of sustainable development and fail to recognize that sustainability requires interdisciplinary approach. Many lobbyists groups and NGOs campaign against nearly every development projects in the developing world. This is quickly becoming a trend, in most cases creating unnecessary pressure and tension. Recent economic progresses and international cooperation, especially Africa’s partnership with China, are allowing the constructions of new infrastructure. Gradually countries are building their Social Overhead Capital (SOC). This will in turn help them to attract more foreign investment. Many African countries are currently building hydropower dams and they see them as sources of clean energy.

One of the top ten economic performers in Africa is Ethiopia. It is currently building five hydropower dams and has recently launched a new project on the Blue Nile River that when operating at full capacity will produce 5,250 Megawatt. Western NGOs have been campaigning against some of the dams on environmental or human rights grounds. Over four hundred NGOs led by Survival International this month signed a petition against one of its nearly completed hydropower project, the Gibe III that is expected to generate 1,800 Megawatt. They say that 200,000 Ethiopians who rely on fishing and farming may become dependent on aid to survive if the dam goes ahead. The government argues that all the necessary studies where made and that the impact on both the society and environment is negligible. Here it is important to bring things into perspective. Ethiopia is one of the poorest countries and has been growing at a rapid rate of 10 plus percent a year for the past seven years and the demand for power is growing at an even higher rate every year. Chronic power shortages were common for the past few years in the country and have hindered investments. The government had to take decisive measures to put a halt to this energy problem that threatened to slow down the countries growth. And the country is trying to transform its agriculture driven economy to an industry driven economy in the coming five years. The country’s prime minister called those who are campaigning against the hydropower dam projects in Africa as “borderline criminals” who are helping to keep Africans poor.

“These people will not allow the disturbance of butterflies even if this means millions of people have to be subjected to the deadliest killer disease of all; poverty. I am not a believer in conspiracy theories but, if I were I would conclude that these people want Africa to remain as it is with all its misery and poverty so they can come and visit nature in its pristine state in winter every so often.” Meles Zenawi Prime Minister of Ethiopia

The important question will be: How can we proceed in the area of sustainable development?

Again economic development is at the core of sustainable development for developing countries. So the activities in these countries are and will continue to be driven by their hunger for economic growth. But this should not mean that social sustainability and environmental sustainability are going to be ignored. In fact, many African countries are making meaningful social and environmental advancements (development) and have not neglected the work in these areas.

There is a need for better consciousness on social and environmental issues and generally on sustainability. Government should continue fostering greater cooperation between the different stakeholders, including governments, civil society, private sector and development partners. Projects should be given careful thoughts, should be well analysed and the impact on society and environment weighed meticulously. However developing countries should not be crippled on grounds of ensuring sustainable development. What should be rather scrutinized is whether countries are undertaking the most socially and environmentally sustainable alternative possible to economic development. Given the resources, the economic condition of a particular country and its need to address development issues; is this project the best possible option as far as social and environmental sustainability is concerned. And a more cost benefit approach should be used as an alternative to evaluate sustainability. Sonia Bueno a Cuban-born researcher and entrepreneur made a very interesting suggestion in her essay: Transforming the Water and Waste Water Infrastructure into an Efficient, Portable and Sustainable System. In this essay she suggests an alternative approach that is based upon an integral, long-term cost-benefit relationship as a measure and monitoring tool for the sustainability of project, activity and enterprise. Under this concept the aim is to evaluate sustainable development by following the principles of conservation and increment of value rather than simply restricting any kind of impact on environment or society.

It is needless to say that developing countries should remain conscious about the social and environmental impact their economic activities might have. Whatever economic activities they undertake, whether it is building infrastructures and industries or running them, using energy, mining, achieving food security or speeding up urbanization, they should make cautious assessments to ensure better results in social and environmental sustainability. International cooperation and strategic partnerships should be developed further and for this to happen mutual understanding on the African context of sustainability is crucial. Ultimately the world has to learn to depend less on single focus whistle-blowers and make a carefully weighed and balanced judgement based on multidiscipline information.

Revolution in the ARAB WORLD: A New Dawn for Democracy or no More than Regime Change? – By: Bernard Laurendeau and Eyob Zerihun

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The last two decades have brought an immense economic progress and the world is on track of halving the poverty level by 2015 from its 1990 level. According to the World Bank, 46% of the developing world population were below the accepted poverty line of $1.25 a day of purchasing power parity (PPP) in 1990. By 2005 experts say that this figure has fallen down to 27% and that a global halving by 2015 is indeed in reach.

The social scientist Seymour Martin Lipset said in 1959 that “the more a well-to-do a nation, the greater its chances to sustain democracy”. Lipset’s thesis shows that when countries become democratic at low levels of development, their democracy usually dies. His thesis triggered a comprehensive statistical study conducted by political scientists Adam Przeworski and Fernando Limongi that looked at every country in the world between the years of 1950 and 1990.

The study concluded the following:

> In a democratic country that has a per capita income of under $1,500 (in today’s dollars), the regime had on average a life expectancy of just eight years

> With between $1,500 and $3,000 it survived on average for about eighteen years

> Above $6,000 it became highly resilient

Many Arab countries mentioned below are well above the $1,500 mark. In 2009, the GDP per Capita in Tunisia was $3,800 whereas in Egypt it was $6,300. In 2009, the GDP per capita in Yemen was $2,400, $4,400 in Jordan, $7,100 in Algeria and $11,300 in Iran. GDP per capita in Bahrain has reached $27,214, in Oman $25,000 and in Libya $14,900.

There is a continuous debate on the correlation of democracy and economic development.  The word democracy itself is a very tricky word, as it is perceived in so many different ways in diverse cultures. Although this is an area that requires additional in-depth scientific studies, those who argue in favor of a high correlation have some strong point in case.  They sternly argue that development and democracy are tied together. Let’s assume that the findings above hold true for the sake of argument.

Hence, one can conclude that the attempt of transition to democracy in these countries might prove to be successful. However as important as this observation is, there are also other necessary conditions. It is important to note that GDP and GDP per capita are not sufficient economic indicators as these do not necessarily show wealth distribution in an economy. Some of these countries are countries with hundreds of billions of Dollars in foreign reserves. However they are unable to neither diversify their economies nor create employment for their educated youth. Literacy rate is thriving and social evolution is taking place. However in most cases wealth is poorly distributed which leads to discontent. And the wave of revolt currently spreading in the Arab World was sparked by this discontent

These days, it seems that the word Revolution is being over-used and in some cases misused. Etymology shows that the word revolutio was used in Latin to describe the revolving motion of celestial bodies. The word revolution was later used in French starting in the 16th century to describe a political upheaval and dramatic change in a nation’s state. However, a revolution does not necessarily have a peaceful and democratic outcome as perceived in general. It can be no more than the revolving motion of a fading authoritarian political body, but emerging again after a brief eclipse. Hence it is essential to ponder when and how a revolution can lead to a stable regime and more or less satisfy the demands of people aspiring for freedom, and pursuing happiness and dignity.

The objective of this article is to examine the conditions under which a revolution can achieve a positive change and not just the opposite.

In order to better understand current events, it is essential to look back and examine the past. When one thinks of revolution, the 18th century and more specifically the American and French Revolutions inevitably come to mind. The American Revolution from 1775 to 1783 followed by the French revolution of 1789 to 1799 which again triggered other revolutions in Europe and elsewhere in the world can be seen as historical monuments marking the rise of nationalism and the beginning of a new world order.

More recently, so-called colour revolutions brought about more or less stable democratic regimes. The Rose Revolution in Georgia in 2003, the Orange Revolution in Ukraine in 2004, the Cedar revolution in Lebanon in 2005 and the Tulip Revolution in Kyrgyzstan in 2005 were able to topple authoritarian regime to establish a more stable regime with fair elections. Even more recently the Jasmine revolution in Tunisia led to the exit of President Ben Ali who governed his country with an iron fist for more than two decades. In the land of the pharaohs, President Husni Mubarak was reserved the same fate after an eighteen days popular uprising.

However, the fruit of a Revolution is not always that sweet. It can be sour. The Bolshevik Revolution also known as the October Revolution and more recently, the Iranian Revolution, are examples of revolutions that did not pave the way for a peaceful democratic regime. Even the French Revolution with its leitmotif of Liberté, Egalité, Fraternité did not overnight give birth to a stable democratic regime. On the contrary, it gave birth to one of the most autocratic despot in world history, Napoleon, reminiscent of the old Roman Empire and with aspirations to conquer the world.

In this age of Twittering, Wikileaks and Facebook taming the empowerment that comes with information and public discussions would require being one of the most sophisticated dictators of all times. Looking back at history and the outcomes of past revolutions, one can only speculate about what will happen next in Tunisia, Egypt and generally the Arab world.

“In revolution, as in a novel, the most difficult part to invent is the end.”(Alexis de Tocqueville)

“Crowds cheer when tyrants fall, but often the problem is what comes next.”(Andrew Bast)

Prior to predicting the outcome of revolutions in the Arab world, it is important to analyse what brought about these popular uprisings.

It will be difficult to compare the situation in these countries with any of the revolutions in recent years. Contextually speaking, given the factors of culture, religion and concerns of Islamic fundamentalism, the revolution in the Arab world, is different when compared to past revolutions in the West. But the factors that brought about these revolts are more or less common. In conflict analysis, one should carefully identify the “conflict factors” and the “conflict triggers”. Conflict factors are existing discontents and tensions, whereas the conflict triggers can be described as incidents, events or circumstances that ignite the conflict. The same logic can be applied to revolutions. The main factors for these revolutions are lack of progressive reform on democracy and human rights from a political standpoint and poor wealth distribution trends from economic standpoint. But what triggered these revolts is unemployment, soaring food and fuel price. In the case of Egypt and Tunisia economic reforms were not followed by progressing democratization. Both countries enjoyed sturdy economic growth after reforms, bringing about social transformation and literacy but unfortunately the progress was not matched in the area of democratization. Frank G. Wisner II the American ambassador at the time of the Gulf war played a key role in negotiating micro-economic reforms package under the guidance of the IMF. However change did not come at all levels. And when democratization processes go to fast or to slow, the consequences are devastating. The trick is to find the right balance.

“The most dangerous moment for an autocratic regime is when it starts reforming.” (Quote Alexis de Tocqueville)

This is what happened in Egypt. Mubarak started economic reforms slowly by recruiting a more modern and capitalist government since early 1990s, leading to growth but unfortunately unequal growth. Not all people saw their power of purchase rise and with inflation and the food crisis, things became very harsh for the majority of Egyptians. The condition was similar in Tunisia. One other related factor can be the fact that Egypt’s government suspended subsidy on food items under pressure from the IMF. According to the CIA fact book 40% of Egyptians leave under $2 a day and inflation on food items was 17% last year alone. Only an elite group made the most out of economic growth in both Egypt and Tunisia. Similar arguments can be made with regard to other Arab countries in crisis.

Of course democracy never took off in both Egypt and Tunisia and so was triggered the Jasmine revolution in Tunisia leading to revolts in Egypt. And protests are now growing in Libya, Algeria, Jordan, Bahrain, Oman and the symptoms are evident in Iran, Djibouti and Morocco. There are also growing fears that this can spread to Saudi Arabia. Many Arab and other African authoritarian regimes are watching the latest developments quiet nervously.

And so stems the question, what are the consequences of these revolutions? Are these events indicators of a major shift in the Islamic civilization as referred to by Huntington in his model of the World (see Clash of Civilizations, 1996)? What is the recipe for stable democracy in the Arab world?

There are seven fundamental conditions required for democracy to succeed in these countries.

Condition 1: Presence of Strong and Organized Political Parties

Arab countries where authoritarian regimes have been toppled are heading into uncharted territories because of the absence of organized oppositions that can at least be viable options in upcoming elections. Toppled dictators systematically dismantled democratic institutions and wiped out oppositions. Democracy in these countries partly depends on how fast and well political parties can be organized and on their success of coming up with credible and feasible agenda in such a short time. Otherwise a power vacuum will be created giving way to violence or at best to military rule.

Condition 2: No Strong Islamic Movements

Trepidation of chaos and Iranian style Islamic state, threw the West- and Israel- into great dilemma. For example in Egypt, the Muslim Brotherhood is the root of many Islamic movements in the region, which over the years became radical. It has been there for more than 90 years. And there are also other Islamic movements in Tunisia feared to be on the radical fringe. Especially the situation in Egypt is testing partly because the stands of the Muslim Brotherhood are not clear even though the organization claims to be moderate. On the other hand, Al-Qaeda poses a threat in the Maghreb. Algeria is a country with recent history of Islamic fundamentalism and violence. Yemen is another country facing imminent threats form Islamic fundamentalism and violence. In his best-seller “The Future of Freedom”, Fareed Zakaria warns of the Islamic exception of the Arab World where Islamic movements are prevalent and might prove to be a challenge for the sustainability of democracy. Strong Islamic movements and their success in ceasing power will jeopardise democracy.

Condition 3: The Stands Taken by Armies

The role of the military in both Tunisia and Egypt was and is crucial. The discipline and level of restraint shown by the armies of these countries brought the march for democracy this far. The armies should stand by the people and not wave the banner of the despots in place. The armies in Egypt and Tunisia are independent institutions thus far. Is the Turkish model viable for these countries or are these armies going to see some of their own rise to power? The army in Turkey played a significant role in bringing stability and democracy in the early 1980s. The late 1970s saw unprecedented violence erupt in Turkey. Bitter fighting broke between the left-wing and right-wing political factions claiming the lives of thousands. In 1978 martial law was announced in 20 provinces out of 67. And on September 12, 1979 a coup d’état led by army generals (National Security Council: MGK) took place and martial law was extended throughout the country. The MGK abolished the parliament and the constitution and banned trade unions and political parties. They maintained the tradition of state secularism. After a referendum on a newly written constitution in 1982, a general election was held and a smooth transition was made to civil and democratic rule. The armies of these Arab countries can change the course of Democracy. The stands that armies will take in these Arab countries are crucial for the success of these revolts in the Arab world. Especially it is critical for the armies to remain secular and to be in the position to stop dangerous political moves made by Islamic fundamentalist. In 1991, the Algerian army intervened in the political process and stopped the Islamic Salvation Front (FIS) from rising to power, though democratization did not follow. The armies can be the guardians of Democracy.

Condition 4: Less Divided Societies

Dictators usually divide and conquer. The successes in Tunisia and Egypt were partly due to unified actions. Unless pro-democracy groups stand together, dictators will capitalise on this weakness to rise to power. Algeria and Yemen are countries with recent history of violence and highly divided societies. This kind of situation can lead to sectarian violence in a hurry. There is a great chance that revolts in these countries may not bring the desired outcomes. Particularly, where there are tribal and religious tensions, conflicts and violence can be easily triggered and the progress towards democracy can be derailed by forces with ulterior agendas.

Condition 5: Strong Democratic Institutions and Well Crafted and Acceptable Constitutions

Fair and free elections do not guaranty freedom without well-established democratic institutions and constitutions. Current revolutions may merely result in regime change. Building strong democratic institutions requires time, but this is the only way forward to build a democracy. So making meaningful constitutional reforms and building democratic institutions is one of the vital tasks needed to ensure democracy in these countries. Failing to do so will leave power concentrated in the hands of a few. And it will be simply back to square-one as far as freedom and democracy is concerned.

Condition 6: Better wealth distribution

Gradually improving on wealth distribution is also another necessary condition for democracy to flourish in these Arab states. An economic system where only some elite reap benefits of economic growth is most likely to fall back into chaos. A strong, educated and rapidly increasing middle class that can challenge regimes and create a check and balance dynamic is the backbone of a stable and sustainable democracy.

“What is most important for democracy is not that great fortunes should not exist, but that great fortunes should not remain in the same hands. In that way there are rich men, but they do not form a class.” (Again Alexis de Tocqueville)

Condition 7: Staying in Touch with the Youth

Many leaders in the Arab world have been in power for twenty, thirty and in some cases more than forty years. There is a great generation gap and these leaders are simply not in touch with the new generation. Their leadership style is from another century. According to the figures from the UN population division, in 2010 the youth in these Arab countries comprise more than half of the population. The Percentage of the population under age 30, in Tunisia is around 52%, in Morocco 57%, in Algeria and Libya 58%, in Egypt 61%, in Yemen 74%, in Jordan 64%, in Oman 62%, in Bahrain 54%, in Djibouti 66% etc… And according to Time Magazine 56% of young Arabs use the internet every day. Internet penetration rate is growing rapidly. This “Tech-Boomer” generation is increasingly becoming the driving force for democracy in these countries. Staying in touch with the youth and with 21st century reality is vital to ensure stability and ultimately to sustain democracy.

Similar to Abraham Maslow’s pyramid, society has a hierarchy of needs. Governments have to realise that and start making the necessary steps forward. When governments put their countries on a path of sustainable growth, they should also foster social transformation and make some real, progressive and carefully calibrated political reforms. All these should run in parallel although each country may have its own delicate balance.

The current fever of revolution sweeping through the Arab world will surely result in the departure of long time dictators. However if the seven conditions above are not met, the movements for change will ultimately result in more chaos and will only open doors for the rise of other dictators or hybrid regimes.

The African Roadmap Series Part I – By Eyob Zerihun

The MDGs, NEPAD programme and Development

The achievement of the millennium development goals (MDGs) is critical for the realization of what some call the renaissance of Africa. The MDGs drawn from the United Nations millennium declaration at the millennium summit in 2000 provide a common framework for combating poverty, ensuring sustainable development and promote peace and security. It consists of eight goals thought to help break the vicious circle of poverty and put underdeveloped countries on a path of sustainable growth and development.

These eight goals: Eradicating extreme poverty and hunger; Achieving universal primary education; Promoting gender equality and empowering women; Reducing child mortality; Improving maternal health; Combating HIV/AIDS, malaria, and other diseases; Ensuring environmental sustainability; and Developing a global partnership for development, were more or less ideas in one of Jeffery Sachs’ famous books. Jeffery Sachs was the special adviser to the former UN Secretary General Kofi Annan. As the matter of fact anybody who read Jeffery Sachs book “The End of Poverty: Economic Possibilities for Our Times” can easily identify his foot prints in the MDGs. In this book Sachs discuss about a plan that can help eradicate extreme poverty around the world by 2025 by focusing on the one billion poorest people around the globe caught in a poverty trap of disease, physical isolation, environmental challenges, political instability, and lack of access to basic required needs such as capital, technology, medicine, and education. He also shatters some persistent myths about poor people and shows how developing nations can do more to help themselves.

William Easterly in his book The White Man’s Burden: Why the West’s Effort to Aid the Rest Have Done So Much Ill and So Little Good, sternly argues:

“The West spent $2.3 trillion in foreign aid over the last five decades and still had not managed to get 12 cent medicines to children to prevent half of all malaria deaths. The West spent $2.3 trillion and still had not managed to get $4 bed nets to poor families. The West spent $2.3 trillion and still had not managed to get $3 to each new mother to prevent five million child deaths.”

Easterly sharply criticizes Western large scale-planning that may seem appealing to market fundamentalist who call for market solutions to solve the problems associated with poverty and is one of the outspoken economist cynical about imposing the “Washington Consensus”. Easterly a University Economics professor is also a former World Bank economist. The way forward for him is to examine each culture individually and offer aid specific to local conditions.

Another economist, whose ideas are widely seen to be competing with those of Jeffery Sachs, is Paul Collier the author of “The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done about It”. Collier also focuses on the bottom billion. He reveals that fifty failed states; home to the one billion poorest people on earth, pose the most fundamental challenges of the developing world and pinpoints a set of solution that can help tackle the long standing issues. Collier analyzes the causes of failure identifying a set of traps that entangle such countries, including civil wars, reliance on extraction and export of natural resources, and bad governance. He wrote: “Standard solutions do not work, aid is often ineffective, and globalization can actually make matters even worse driving development to rich countries”. According to him what the bottom need is a bold new plan backed by the G8. He argues that the group of eight has to adopt policies, new laws against corruption, new international charters and even conduct carefully “calibrated” military interventions. Even though some of his suggestions sound extreme and impractical in the eyes of today’s international politics, he pointed out some key points in his analysis.

All three renowned economist mentioned above have wealth of experience and are people in touch with the realities in the developing world. And there intellectual works are based on great amount of statistics. Some see there views as different contradicting approaches in the battle against poverty but these are not competing ideas but rather very useful ideas complementing each other that can serve as general frameworks to be later on customized according to the need and context of each developing country. Looking at the progress of the MDGs, it is important to understand and recognize that in principle, we are in the right path in the stratified combat against the vicious circle of poverty. But there is an old expression that says the devil is in the details. That’s where in depth knowledge, analytical skills and great flexibility is required. How well can African nations develop strategies and policies within these broad frameworks to effectively achieve the goals? In other words the main question is: How can it be achieved?

The three economists mentioned above have a number of things in common and that includes their dissatisfaction with the approach used by the West for years.

Encouraged by the level of political commitment shown on the MDGs, African leaders embraced the call for global partnership to eradicate extreme poverty and hunger and in 2001 the New Partnership for Africa’s Development (NEPAD) was established. NEPAD programme is an all African initiative coherent with the MDGs. Most importantly it is owned and managed by Africans. Briefly described by the NEPAD Secretariat itself; “NEPAD is a pledge made by African leaders, based on a common vision and strong and shared conviction, that they have urging responsibilities to eradicate extreme poverty and hunger and to place their countries on a path of sustainable growth and development.” (Statement taken from: NEPAD in Brief)

Colonialism, the cold war, the world economic system and years of failed policies and ideologies exacerbated poverty and fuelled conflicts on the continent of Africa. In most cases post-colonial Africa inherited weak states and dysfunctional economies. Furthermore many African leaders lacked the political will required to take their countries out of poverty and Africa remained marginalized from the world economic and political scenes for decades. The battle of the two dominant ideologies during the cold war was another negative factor that further aggravated poverty and instability. For centuries Africa’s role in the global economy was limited to providing cheap labour and raw materials. Although the continent is rich in natural resources, these resources were largely misused and have been sources of conflicts in the majority of the cases.

After African countries gained their independence in the late 1950’s and early 1960’s they had only two options. And that was to follow capitalism or socialism; ideologies that were never meant for African nations. In fact the same is true for many other theories, ideologies and other economic philosophies. The problem was further exacerbated by the cold war as the two super powers tried to extend their ideological territories. The great divide created during the cold war has affected open mindedness on policy issues. Especially the US or more generally the West’s flexibility and its will to entertain other ideas have been seriously affected. And many international institutions and even some African intellectuals failed under their influence. The West including America has invested a great deal of money and tried to change the world for the better. There was no lack of good intensions. But it was done under a confined mind set. Many people are still in that cold war driven mentality even though they are not conscious about it. They are more ideological than pragmatic. Some American intellectuals should be conscious that views and ideas outside Capitalism are not necessarily Communism. At the same token the developing world was numbed by the deafening propaganda from the socialist camp. This has to change and is gradually changing.

TIME Magazine columnist Alex Perry in his essay; Lions on the Prowl: By confronting their problems, Africans have earned the right to dream great dreams, writes about how Africans have started addressing African problems. In this essay Perry discusses how Africa’s economic growth is rising steadily and the growing opportunities for investment. He wrote: “It isn’t in comparison with its past that Africa is doing well. It’s in comparison with the feted stars of the new economy.” In a paragraph that depicts the current political and economic environment he wrote: “But when the global elite meet in Davos, they might take a moment, stop thinking about China and the European sovereign debt crisis and the democratic sclerosis in the US, and think about the continent that often gets left out when great matters of globalization are discussed.” And in another paragraph he adds: “The benefits of globalization, long something of a conviction at Davos will mean something really mean something – when they are extended not just to Asia’s but to everyone.”(Quotations from: TIME January 31, 2011 issue)

French President Nicolas Sarkozy who assumed the EU’s rotating presidency seems to be committed to put a halt to Africa’s marginalization from the world political and economic arenas. The President visited Addis Ababa during the 16th Ordinary Session of the African Union Commission. He expressed his support for Africa to have a more active role in the United Nations Security Council, the IMF and the World Bank. In an interview to Capital (an Ethiopian News Paper) the French ambassador to Ethiopia Jean-Christophe Belliard says: “The French President is coming with new ideas, and if there is one outcome we want to see, it is Africa having a better say in world affairs, a fair representation of Africa in the UN Security council, a fair representation of Africa in the IMF, the World Bank, G8 and G20. France wants Africa to be heard and represented, not on ad-hoc basis but regularly.”

The fact that this view is rapidly gaining momentum is encouraging for Africa. But on the other hand it is essential for Africans to improve in the area of policy making and analytical thinking. Open debates on policy issues, is critical and can help Africans refine their skill in this area. It is only then the continent will take advantage of such political settings.

NEPAD provides a framework for sustainable development. The Johannesburg Plan of Implementation (JPOI) recognizes that achieving sustainable economic growth and development requires creating enabling environment at all levels. The plan calls on international development partners to support the continent’s effort to foster peace, security and stability, conflict resolution and prevention, democratization, respect for human rights and fundamental freedoms, gender equality and good governance. These were identified by African leaders as the necessary conditions required for ensuring sustainable growth and development. The NEPAD Secretariat has continued to offer intellectual leadership and technical and policy support in the priority areas for which it was established. Africa has made a significant leap over the last few years in the areas of agriculture and food security, good governance, capacity development, gender, infrastructure development, education and health, science and technology, trade and markets access; environment and climate change. The NEPAD Secretariat works closely with the African Regional Communities (REC). The RECs are responsible for the implementation of development programme but the NEPAD secretariat coordinates and mobilises resources. NEPAD is doing a very good job in this area. However NEPAD’s planned integration into the African Union is a great concern. NEPAD may be drowned in the bigger bureaucracy of the African Union and become less effective. Africa should proceed with caution and carefully consider the terms of the integration. However if successful the integration will make political leadership more convenient and help reduce redundancy.

The MDG Report 2009 (MDGR 2009): Assessing Progress in Africa toward the Millennium development Goals indicated that the progress towards achieving the MDGs was on course despite the food crisis, fuel crisis, and the global financial and economic crisis that started in the year 2008. The report also underlined the need to scale up the much-needed development assistance by development partners if gains are to be safeguarded and future achievements secured.

Even though from the very first beginning some development partners failed to increase aid and development assistance as pledged, international cooperation has brought the MDGs a long way in Africa. China’s development assistance and vendor financing including the technology transfer it brings along, GTZ’s (now GIZ) work on capacity building, infrastructure, good governance and its partnership with Africa in the area of peace and security, US assistance and increased aid on HIV/AIDS, Malaria and Tuberculosis, European Union attempts to eradicate poverty by encouraging trade and providing aid for MDGs and fostering them, are among the different areas of global cooperation. Development partners and international institutions are becoming more and more effective by focusing mainly on technical assistance. The African Union, NEPAD, the African Development Bank and the United Nations Economic Commission for Africa are providing intellectual leadership and strategic framework for Africa. UN agencies, funds and programmes, NGOs and other IGOs (Inter-governmental Organizations) are engaged in the more technical areas of implementation.

The recent economic crisis presents challenges in achieving the MDGs. G8 countries struggled to meet pledges made for development assistance. And the situation can get even worst with most of developed countries deep in deficit. European countries are taking drastic austerity measures and the Euro zone is in profound crisis. Some argue that governments have spent a lot of money treating the symptoms of a huge economic disaster and are left with virtually nothing to deal with the main issues. And they predict that the tough times are only ahead. Hence developed countries may not be in the position to maintain the level of development assistance.

Look at the trillions of dollars spent in aid. What was actually achieved? Many argue that development aid from the West has done very little good and that African leaders have become heavily dependent on it that they have become reluctant in bringing development. They argue that aid money is rarely used for the right purpose and has rarely reached the intended recipients and that it has been only serving the corrupt. This is a legitimate observation. But the most important question is why? It is mainly because of the way aid was provided. And this is not a matter of personal opinion but of factual assertions with relevant data. Africans heavily depended on off-the-shelf policies from the West and were indifferent to answer the demand of their people. There was no African initiative in the efforts made to lift Africa from its poverty and the path followed for decades was more or less fruitless. It is true that Africa should learn to be less dependent on foreign aid. And there should be a mechanism to ensure that aid is used for the right purpose and ensure accountability and transparency. There are some progresses in this aspect as well.

The need for efficiency and adequate utilization of scares resources is becoming more critical than ever. Given the current economic situation, development partners may or may not be able to live up to Africa’s expectations when it comes to aid. Africa should improve on the way it uses and mobilize resources. Improvement in efficiency of resource utilization including cracking down on corruption, prioritising different development activities based on their importance and supply only the necessary fund and cutting the cost of less important activities, reducing non-productive consumption and mobilizing local resources seem the way forward for Africa. The economic growth that many African countries have managed to produce over the last few years should boast further economic development and sustainability on the continent. But this can only happen if Africans can cut on their non-productive consumptions and reinvest the wealth or the capital gained. Fostering savings and subsequently being able to mobilize these resources and channelling them to the right development activities should be given due consideration. The other critical area for securing resources for development is in the area of tax collection. If government can effectively collect taxes in a timely manner, it will certainly help secure more resources.

The United Nations Economic Commission for Africa (UNECA) has a division working on strategic frameworks in the area of regional integration, trade and international negotiation, infrastructure and natural resources development. The division in charge previously known as the NEPAD and Regional Integration Department (NRID) now the Regional integration, Infrastructure and Trade Division (RIITD) is responsible for the development of natural resources in Africa. Its task is essentially to do analytical works and provide intellectual leadership for the achievement of NEPAD goals on regional integration, trade and infrastructure. During his visit to Addis Ababa, Australian Foreign minister Kevin Rudd pledged that his country will work with Africa in the area of mining and Energy. Australia has a vast experience in this area. And the cooperation will allow Africans develop new regulations and enhance the existing ones to maximize benefits from natural resource. The Foreign minister promised that his country will be working closely with the African Union to bring new breakthroughs in this area. For a continent where most countries heavily rely on natural resources for economic growth, the need for leadership and cooperation in mining and energy is vital. Ensuring that African countries get the right benefits from these resources should be one of the top priorities.

Six countries in the list of top ten world countries ranking, based on the average annual decline in the poverty rate are African countries. These are namely Gambia, Mali, Senegal, Ethiopia, The Central African Republic, and Guinea. The economist notes that there were challenges in the area of funding as development partners struggle to fulfil pledges made to support and accelerate development and that the global financial crisis made it even more challenging. However, it is also important to note that meeting the MDGs and NEPAD targets is not limited to spending more money. The economist made some important remarks; “the top performers in Africa got successful in cutting poverty not by spending public money but by encouraging rapid economic growth.” That’s where effective policy making, strategy formulation and implementation come in the picture. Meeting the targets is not a matter of merely spending large sum of money it goes beyond that. It is also about stimulating the economy in the right way.

There are also other views. The Economist Magazine (issue: September 25th 2010) wrote that in ten years, the living conditions of the poor have been improvingbut not necessarily because of the UN’s goals. Than how were the reductions in enfant mortality, and increased maternal health and literacy were achieved in Africa? How is Africa making progress in combating HIV/Aids, Malaria and Tuberculosis? How is the continent achieving an annual economic growth average of 5.5%? If there are any valid arguments about how these are being achieved without the MDGs, then they should be made public. But we haven’t seen one yet and the ones already made are a bit ambiguous. The United Nations has defended the MDGs and its secretary general Ban Ki-Moon, called the MDGs “a milestone in international cooperation”.

“The United Nations reckons that in 2008 over a quarter of children in the developing world were underweight, a sixth of people lacked access to safe drinking water, and just under half used in sanitary toilets or none at all. But while these figures are disquieting, a smaller fraction of people were affected than was the case two decades ago. So such data also indicate the world’s progress towards meeting the Millennium Development Goals (MDGs), a set of targets adopted by world leaders at the UN ten years ago.”(The economist)

The MDGs and NEPAD programme are in fact taking Africa forward.

Whether African countries decide to follow balanced or unbalanced growth strategy or focus on food security by improving the productivity of the subsistent farmer and encouraging large scale corporate farming, or/and focus on land management, insuring environmental sustainability, human capacity building and develop their social overhead Capital (SOC); they have to come up with some real-time feasible plan that has taken their particular situation into consideration. Doing so requires having broader perspectives and being more practical. African intellectual leadership and the increased level of African initiative have played a decisive role in the current development achievements. Again Africa should continue building its capacity in the area of policy making. Western partnership in empowering Africans in this area is critical. When attempts to further involve Africa in international affairs yield fruit, we can expect that development will be even more accelerated.

Issues related to development, sustainability and peace are of cyclical nature. If there is no development there is nothing to sustain. If there is no sustainable development there is no peace. And if there is no peace there is not going to be some meaningful development. So the question is how do we sustain development? The next part of the African Road Map Series will focus on Sustainability.

Tailor Made Policies and Regulations: An African Perspective – by Eyob Zerihun

African Policy Argument

The world’s economic system is undergoing through some tumultuous times. The collapse of the global financial system followed by a global economic downturn is continuing to affect millions of lives around the globe. Is this perhaps the end of capitalism? Should we start considering some other alternatives?

Some argue that for years developing countries have been forced to follow ideologies imposed by the west, simply because of lack of alternatives. Some African leaders have been openly criticizing the extremes of the capitalist manifesto while others reluctantly embraced it. Even after the fall of the Soviet Union, Communism is still an ideology to contend with, at least in some parts of the world.

“Capitalism is a continuous attempt to corrupt mankind.” Fidel Castro

Whether it’s Socialism or Capitalism, ideological extremism is counter productive. Even though capitalism has proven to be highly beneficial to the world; in these last days we’ve seen that if taken to the extreme, it can also be destructive. Renowned modern day economists have been warning of a financial market meltdown and of possible economic crisis for years. Apparently nobody wanted to listen. International institutions such as the IMF and the World Bank urged emerging economies like Brazil to regulate their financial market but sadly couldn’t make any impact in their own backyard.

Noble prize wining economists Joseph Stiglitz and Paul Krugman are against the notion that dominated the world landscape since President Ronald Reagan: widespread arguments that markets work well on their own and that governments should remain hands off. These modern day economists vigorously emphasized the need for government supervision in the financial market. Thought the extreme views of free market sound good theoretically, they have flaws. But now at last, there seems to be a broader agreement on the fact that free market needs regulations. These economists argue that somehow we need to find the balance between free market driven economies and government oversight. Successive US Administrations continuously peeled off the existing regulations, creating a vacuum for abuse. And now we are all paying a price. We need to answer one critical question: How far should we go in regulating markets?

And some have even gone to great length and started contemplating on the possibility of introducing a new form of Social Democracy. Modern Social Democracy took its current form in the early 20th Century. It incorporates elements of both Socialism and Capitalism. UK’s Labor Party and other European countries have been using Social Democracy for years. Especially former UK’s Prime Minister Tony Blair made the Third Way Social Democracy very popular. You take the individualism out of regulated Capitalism and you will get closer to the idea of the Third Way Social Democracy. I personally believe under the current conditions, African policies should have a stronger social aspect. Social Democracy has been around for a while but only now they are looking into how to make it globalization friendly. But others on the capitalist fringe insist that there is no need for that and that capitalism is alive and well, it just needs to be tuned up and polished. True! But the question is: Is it a universal truth? Should we still galvanize developing countries into taking on the extremes of capitalism? For now, even the Third Way Social Democracy can be extreme for many African nations.

Stiglitz in his work that deservedly won him the Noble Prize (Globalization and its Discontent) argues about how “imperfect” information can make markets go out of order, giving unfair advantage to one party. According to him globalization brings new opportunities to exploit people with less information. In his own words: “Globalization opened up opportunities to find new people to exploit their ignorance. And we found them.” Globalization in its current form is not creating a win-win situation for developing countries. Stiglitz sees globalization as an unrealized potential in eradicating poverty and promote economic growth. And he argues how imposed austere IMF policies exacerbate problems on a number of issues and blames the “market fundamentalism” that endorses the view that: “free market solves all problems flawlessly”. He also questions how a public institution can ignore growing evidence of flawed policies and not take actions or be held accountable. Some of the other important points rose by Stiglitz and co-authors in different books, but often ignored by the west are the issues of fair trade, agricultural subsidies and the Washington Consensus for developing countries. In his book “Making Globalization Work”, he calls for greater democracy in global trading system and argues that the current global system is stacked in favor of the rich nations. In many Africans opinion the Washington Consensus is another ideological and political imposition on developing countries. Dani Rodrik, Professor of International Political Economy at Harvard University, criticized the “Consensus”, in his paper “Goodbye Washington Consensus, Hello Washington Confusion?” “The Washington Consensus is over” declared Gordon Brown following the 2009 G-20 summit. Regardless, there is no doubt that we need to rethink globalization.

Capitalism creates wealth but it also widens the gap between the rich and the poor. And in a continent like Africa where there is widespread poverty and hunger wealth distribution can be an issue of life or death. We need to at least overcome extreme poverty and hunger before we consider western style free market and liberal democracy. In these developing countries capital is a scares resource and only those who already have it will benefit. That is why investment and economic policies should take these into consideration and encourage foreign and local investors, who do not only aim to dominate local markets but businesses aiming to compete in the global market. This will create competition in labor markets resulting in better wages opening doors for the rise of the middle class. On the other hand there is a genuine concern in the area of foreign investment and that is the fear of exploitation. Once the wealth is produce there is no guaranty of reinvestment and the overwhelming portion of the wealth produced will go out of these developing countries. This is one of the areas in which some African countries have tough regulations. Even some sectors are nationalized and monopolized by government. Developing countries often look for guaranties of reinvestment for an extended period of time. If not, some of these countries prefer to see their economies go through metamorphosis, from substantive agriculture based to agro-industry and then to industry and service based economies. They prefer to create their own brands of bourgeois first and then invite everybody else later.

In these days marred with financial crisis and economic recessions, Krugman believes that worst banks should be nationalized and argues that regulations are too Wall Street friendly. Right centre or extreme right economist may have problems swallowing this idea. If it’s going to best serve the recovery, why not?

Western countries have been fostering liberalization and privatization in developing countries. However countries which were under Communism couldn’t easily get rid of its influence. In some of these countries Communism has been dominant for more than decades. Slowly they’re going easy on market regulation and are gradually liberalizing. It is also important to acknowledge that there is no guaranty that poorly regulated markets will bring more prosperity for all stakeholders. In fact there was a time during the Clinton administration when Stiglitz and Larry Summers, now Obama’s chief economic adviser, were engaged in stern policy debates on this issue. Entirely opening up developing markets will result in exploitation and smash some sectors of local businesses and emerging industries. Of course there are open investment sectors that offer great opportunities for foreign investors and they should focus on those.

There are people in the west who relentlessly defend western ideals and values on economy, freedom and democracy and anyone who comes up with a slightly different world view is fiercely criticized and even scrutinized. But we have to go beyond ideologies and focus on becoming more pragmatic. The reality on the ground can be proven to be totally different. We should actually encourage intellectuals who go ahead of ideologies and unveil the real world situation. In my opinion, what we need is to become more pragmatic and less dogmatic. Most of the ideals from the west are surely what we need to be aiming for. However we should make ideologies fit for situations and not the other way around. Political parties around the world are often founded based on certain ideologies. I believe this affects flexibility. Such parties will be more bent on following those ideologies, rather than adapting to situations.

We cannot microwave democracy nor fully grown free market systems. Noble Laureate Amartya Sen in his book “Development as Freedom” argues that advancing development will result in political freedom. He sees both development and political freedom as means and end. Fareed Zakaria in his book “The Fundamentals of Freedom” that deals with fundamentals of democracy mentions the correlation between democratization and GDP per capita. He mainly discusses about how democracy works in some situations and not others, and that it needs strong limits to function properly. According to him democracy is not inherently good. Zakaria has been under heavy criticism from ideologists for his views on this matter. A number of reviews on his book are posted on the web. He was admired by many for his work and accused by ideologists, of abandoning American ideals and values. Again this should not be about ideology. One can even take his argument further and say democratization has a direct correlation with social evolution. Democracy is our God given right and the American ideal originates from this very fact. But democratization is a process. Democracy is rather something that we grow into and it is directly related to economic growth and social evolution. Of course, there needs to be genuine commitment to democracy. But only those of us who are living in a Third World Country can understand Fareed Zakaria’s logic in this argument. This is one example how the west can misread the situation in the developing world. Similar arguments can be made in the area of economic policies and regulations. What we can do to speed up democratization in Africa is to create and increase awareness on democracy, increase literacy and rational thinking and gradually build and strengthen democratic institutions. Good governance, accountability and transparency should be strengthened as well. Otherwise politics in Africa will be emotionally driven rather than rationally. We need to make sure that the coming generations adopt a democratic culture. Democracy can be abused and backfire, if we fail to lay down the right foundations.

In one of his articles “The Capitalist Manifesto: Greed is good” on Newsweek (June 22, 2009), Zakaria wrote: “What we are experiencing is not a crisis of capitalism. It is a crisis of finance, of democracy, of globalization and ultimately of ethics.” We can agree that these are the factors that brought about the current mess. We cannot rely on unregulated or laissez faire capitalism assuming all other factors such as finance, globalization, democracy and ethics will remain perfect. That’s exactly why we need regulations. What caused the financial crisis in America was outright greed. A financial system heavily leveraged by subprime mortgage, got out of hand. Mortgage lenders and derivatives traders at Wall Street, lent all the money at their disposal and then sucked the global financial resources by other means including selling subprime mortgage backed security, and lent more until the pump got dry. Liquidity in the financial market reached critical level forcing governments of developed countries to pump-in billions of tax payers’ money. The people who brought about the chaos managed a spectacular golden parachute escape. This is evidence that without a mechanism to harness it, greed can be deadly. And this same principle can apply to Africa.

Currency Control is another sensitive area in some African nations. Some say that they should be used in countries struggling to bring trade balance especially in countries in which export is not as nearly strong as import. Such regulations will surely change as Africa’s industry, manufacturing and service sectors make a significant progress and Africans reach an acceptable level in trade balance. And there are progresses in these areas. The United Nations Economic Commission for Africa is the largest UN organ on the continent. One of its substantive divisions; the Trade, Finance, and Economic Development division (TFED), publishes a yearly report on economic performance. Its latest edition, Economic Report on Africa 2009 shows a record growth of industry’s value added of 8% and the manufacturing sector shows a rather impressive growth of 9.6% for the year 2007. Services somewhat lost a few per cent in 2007. On the other hand the instability of the dollar which is the single international reserve currency is forcing developing countries to appreciate and depreciate their currency to cop up with the impact this may have on their economies. There are radical views by European economist Robert Mundell (“Father of the Euro”). In RAMs (Robert A. Mundell) Column he wrote: “I believe that exchange rate volatility is a major threat to prosperity in the world today. It is volatility of exchange rates that causes unnecessary volatility in capital markets.” Stiglitz argue that there is a need for a new international reserve currency and that the dollar is too unstable to remain the single international reserve currency. This is yet another field for political battles and many believe that it is too soon to start looking for another international reserve currency.

There is often tendency in the west to over generalize. The “one size fits them all” problem can be more descriptive. International institutions try to copy and paste some of the best practices learned from other parts of the world. For example what worked for Vietnam or Cambodia may not necessarily work for any given country in Africa. We have different strength, opportunities, weaknesses and threats and the political, economic, social and technological situations that we are in are not the same. Even though Africa may have similar challenges with some other developing countries in the world, the continent has many unique challenges of its own. Even the challenges faced by each African nation are not the same. Often times, factors considered to take stands with regard to African economic policies may not reasonably reflect the reality on the ground or very important factors are ignored or left out. We are not all facing identical challenges so we might not as well tackle them the same way. And in some cases problems are made worse by political rigidness in the west and extreme level of paranoia in the developing world.

The deficiency lies in the limited understanding of the distinctive characteristics of the African economic environment and on the analysis and interpretation of information and statistical figures. There are too many factors and the relationship between them is complex. One needs to be well acquainted to the diverse factors on the continent. So the best way to go about policies and regulations will be to enable, empower and encourage Africans to get more involved in policy making. In today’s world more than ever, policy making requires broad perspectives. Economic policy makers should be well aware of a whole range of issues in policy development: food security, climate change, gender equality, education, maternal health, HIV&AIDS and Malaria (including its impact on Human Capital), good governance, capacity building, infrastructure development, science and technology, ICT4D, knowledge economy, world politics, culture, history and the list can go on.

The best minds in the world came up with the MDGs and NEPAD Programs. Even though these are going fairly well in many African nations they’re chocked by political bureaucracy, conflict, corruption and the like in others. Once again in 2008 despite a higher inflation rate mainly caused by global food and oil price, numerous countries in Africa have performed well vis-à-vis common goals set in the MDGs and NEPAD Programs: combating extreme poverty and ensure sustainable development. The African overall economy grew by 5.1% in 2008 and 6.0% in 2007. Almost all of the top 10 African economic performers are oil and mineral reach countries apart from a few exceptions. Growth rate in 2008 was affected by decline in oil and mineral demands. According to the economic report on Africa, only 6 countries from the 2007 top 10 economic performers managed to get into the top 11 in 2008. This is a good reminder that economic growth in Africa remains fragile and that countries need to diversify their economies to ensure sustainable growth.

Currently intra-African trade is as low as 5%. Increasing intra-African trade can make a huge difference in the continents economy. Progresses in Intra-African trade heavily depend on the successes in areas like Regional Integration, Knowledge Economy, Human Capacity Building, Infrastructure and Africa’s Industrialization. However the challenges faced in raising capital for this purpose are matchless. Intra-African trade can make a significant leap, only if African countries’ industry and service sectors continue to make a meaningful growth. There is no way that Intra-African Trade can grow while almost all African countries provide similar and unprocessed agricultural products. The United Nations Industrial Development Organization (UNIDO) and the World Bank have a joint program generally referred to as Cluster and Networks Development Program. The program is part of their efforts to reduce poverty and build trade capacity in developing countries by helping small and medium businesses and industries overcome common challenges. This approach can play an important role in accelerating Africa’s industrialization. With the recent economic growth some African countries are enjoying, there is an increasing appetite for consumption on the continent. If Africans can develop the right products for the market and reach them they can be successful. Anyone who has read Vijay Mahajan’s book “Africa Rising: How 900 million African consumers offer more than you think “, couldn’t agree more with the fact that Africa can offer a lot more.

Zambian Economist Dambisa Moyo in her book “Dead Aid” argues that development aid is playing a negative role in Africa. According to her if assistance focused on emergencies, rather then development, African leaders would be forced to rebuild their rickety economic foundation. Talking about African leaders, she says: “If Africa knew there was a time when aid would stop, it would jump-start them into making changes. Somebody have to pull the trigger.” I agree with most of Moyo’s analysis of the situation. She has successfully compiled a book that clearly describes the negative facet of development aid. But it’s also important to consider the other side of the story. Of course eventually a time will come when developed countries will gradually withdraw development aid. The sooner African countries stop depending on assistance the better. However, there are countries on the continent with feasible development strategies crippled by lack of capital. What should change rather, are the approaches of development aid and the attitude of African leaders towards it. Development aid is not going to be there forever.

Jeffrey Sachs in his essay “Homegrown Aid” (April 9, 2009) comments on Obama’s program to support agriculture as followed: “A crucial factor in determining the program’s success will be how Washington delivers aid to the farmers. The traditional approach and the wrong one in this case, would be for Washington to try to decide what’s best for each country, and then spend considerable time and money on report-writing, site visits and professional advice. When aid programs are operated this way, they can end up spending half or more of their funds on United States-based travel, personnel and administration, and take years to get off the ground. The benefits for poor countries are then much too little and too late.” He argues that the best approach will be to invite recipient countries to prepare plans and budgets that will be reviewed by independent experts and not decide on what kind of aid each country will receive. Accordingly the role of the donors will be to scrutinize the strategies, monitor to gauge results and avoid corruption, consult and support these countries. And he mentions examples of how this approach has been successful. If used by international organizations, this approach can be useful in virtually all areas of development assistance and partnerships.

Development aid is saving millions of lives in Africa and changing them for the better. I’m sure that all Africans are grateful for that. But development aid alone is not going to bring permanent solutions. Avoided, often ignored and yet more sensitive issues such as fair trade should be given due attention. Fair trade is a politically impossible hypothesis in some developed countries. That’s why many African intellectuals believe that development aid is the west’s compensation to developing economies for not living up-to its moral obligations on fair trade and other political and economic de facto. We should not expect things to change overnight nor expect developed countries to withdraw agricultural subsidies at once. This is not an easy task and it has political consequences. Just like Africans are gradually growing in areas such as democratization, free market and liberalization, the west needs to grow in the area of fair trade, if we want globalization to work. Getting political willingness, defining the course of actions, and growing commitment to gradually ensure fair trade are the first steps. Will we ever see a breakthrough in this area? Can we break the political deadlock?

Aid and loans from international institutions such as World Bank and IMF, come with strings attached. Some leaders in Africa accept these impositions in principle to get access to these resources but are not really committed to them. With Chinese and Indian increased involvement in Africa with fewer or no requirements for democratization and liberalization, my fear is that some African countries may altogether abandon their commitment and plunge once again into authoritarianism and strongly controlled market. Le Monde Diplomatic” (English Edition July 2008) issued an article about how DR Congo was given an ultimatum to choose between a Chinese deal of infrastructure development for oil / mineral resources and an IMF loan. The DR Congo was warned that its request for loan from the IMF might be jeopardize by its new deal with the Chinese if it goes through. Now this is exactly the kind of confrontation these institutions need to avoid. This will only push further developing countries into becoming more and more dependent on the Chinese. These institutions need to reposition themselves and get in touch with the realities of this new millennium. There are countries in Africa who have genuinely embraced the notion of moderate free market, liberalism and democracy. Again, I think the way forward will be to encourage these countries to renew their commitment to democracy, enable them to bring about social evolution in these areas and gradually build and empower democratic institutions. On the other hand China and India are taking advantages in the not so liberalized markets in Africa. The west should not merely wait until African markets are entirely liberalized and privatized, it should instead review its strategic and diplomatic ties and come up with viable options. Expecting fully mature democracies and economies to sprout over night is not only ineffective, but it’s also being impossibly idealistic. We should rather deploy a progressive approach. In addition the west should break away from the notion of market fundamentalism and assume a more practical position. Fair trade should no longer be a political taboo. We should start working together today to ascertain fairness in the global market tomorrow.

What Africa needs is tailor made economic policies and regulations to ensure rapid development. If Africans can significantly improve in policy making we can see the changes that we all hope to see.

Conceivably some markets will be highly regulated and some less regulated in the years to come. It is not always in the best interest of these African nations to highly deregulate and liberalize markets. Regulations are like incubators for these developing economies. We just have to make sure that there is enough light, warmth and air. Finding the balance in all of this, can be game changing. And this should not be contorted to mean that everything and anything should be regulated. Moreover we should not expect all African countries to have carbon copy policies and regulations nor depend on policy handouts from international institutions. Africans need to put in place comprehensive development strategies, avoid ideological battles and become more flexible and result oriented. Furthermore we have to make sure that the policies and regulations are not intended to get a grip of political power and that they are not unnecessarily tight.

Africa needs to devise mechanisms to efficiently use development aids and should start actively participating in the efforts being made to redefine globalization and in the reforms of the IMF, World Bank and WTO. Unlike the previous trend, Africa should be involved. A very common view in Africa was well expressed by the former UN Secretary General Kofi Annan in an exclusive interview with “This is Africa – A Global Perspective” (A monthly Magazine published by Financial Times Limited March 2009):

“The G8 and G20 have influence, but they don’t have legitimacy. They have influence because they are big economies; they meet once a year, make decisions that affect people who are not invited to the table. If you are going to reform the system, it has to be based on universality”

Needless to say, that in a continent with widespread corruption, we should be very much vigilant. The African Union estimates that corruption costs the African continent around $150 Billions a year (Source: Times Magazine July 13, 2009). Although it is not an easy task Africans should further intensify crackdowns on corruption.

Partnership with China is essential; however Africa needs to be more cautious in its dealings with China. It should be more conscience of unfair exploitations.

Another important area is climate change. Fostering environmental sustainability is one of the eight millennium development goals. Climate change is posing an enormous threat to food security and economic development in Africa. The continent’s contribution to green house gaz emission is virtually close to zero, but it is the foremost victim of the dire consequences. Policy makers should give due considerations to the issues of climate change and Africa should act in union with the world to bring order to this agenda.

Economic growth, democracy and social evolution are highly interrelated and failure to have thorough understanding of these relationships will make development efforts and democratization cases of trials and errors. Success in Africa utterly depends on how well we read situations and can adopt policies accordingly. It requires greater flexibility and thinking outside the box and conventional wisdoms.

One last question that needs an answer is: Is there a political will?

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