A high-level conference of African, Asian and donor leaders concluded here on 21 October by adopting the Tokyo Agenda for Action, which emphasizes measures to reduce African poverty and integrate the continent more fully into the global economy. The industrialized countries should continue to "extend hands of solidarity" to Africa, Japanese Prime Minister Keizo Obuchi affirmed two days earlier at the opening of the Second Tokyo International Conference on African Development (TICAD-II). He stressed that such support must be maintained despite the economic crisis affecting Asia and threatening the global economy, and urged a renewed development compact between Africa and its external partners to sustain economic growth, reduce poverty and promote peace and democracy on the continent.
Photo: Japan Ministry of Foreign Affairs
During the conference, key donor officials and representatives of virtually every African country -- including 13 African heads of state or government, as well as UN Secretary-General Kofi Annan -- outlined the broad contours of such a compact. African leaders vowed to make their economies more competitive, while simultaneously pursuing steps to improve the education and social conditions of their people. Several donor officials, most notably from the UK and Sweden, announced significant increases in aid allocations to Africa, and many others, including Japan, promised more energetic action to alleviate Africa's crushing debt burden.
Significant reforms in Africa are creating a more hopeful climate for growth and investment, Mr. Annan noted during the conference's concluding session, but this growth remains fragile, as Africa recently has been subjected to outside "economic and financial turmoil and contagion," while "perennial social problems such as malnutrition, hunger, disease and lack of shelter are still widespread." Such difficulties make Africa "the greatest development challenge facing the world today," requiring an enhanced mobilization of both domestic and international energies and resources, the UN Secretary-General declared.
The gathering, organized by the government of Japan and jointly sponsored with the UN and the Global Coalition for Africa (GCA), was a follow-up to the first TICAD conference in 1993, which emphasized support for good governance and private sector development in Africa at a time when international attention to the continent was flagging. The second conference has been of even greater significance, commented Ghana's President Jerry Rawlings, "since Africa is now even more integrated into a globalized world."
In approving the Tokyo Agenda for Action, African leaders have pledged their "moral commitment" to do everything possible to achieve its goals, Malian President Alpha Oumar Konaré declared. "Africans are giving you our word."
Africa's efforts already have brought "tangible improvements" in economic performance, Sir Ketumile Masire, former president of Botswana and currently a co-chairman of the GCA, emphasized at TICAD-II's opening. Over the past three years, he said, most African countries have had growth rates above 3 per cent, with a number enjoying growth of 5 per cent or more.
Mr. Annan also drew attention to such "good news," citing not only recent economic achievements, but also an end to long wars in some countries and widespread democratic transitions. Because of Africa's continuing poverty and conflicts, however, some have argued that "talk of an African renaissance is unrealistic or premature," the UN Secretary-General noted. "But let us not forget the dramatic gains that have already been achieved. Today I bring to you a message of hope, hope that we can put to rest the inaccurate portrayals and perceptions of Africa, hope that we can consolidate the gains achieved so far, hope that Africa will at long last realize its great potential."
Numerous speakers similarly highlighted Africa's recent progress, and pondered how the continent's "success stories" could be better brought to the attention of donors, as well as potential foreign investors and trade partners.
Meanwhile, many African delegates worried about the possible hazards of greater global economic integration, particularly in light of the severe crisis in the Asian "tigers" and its impact on Africa's own growth prospects (see article "Africa tenses for Asian aftershocks"). Malaysian Prime Minister Mahathir bin Mohamad described in forceful terms how the rapid inflows of capital into Malaysia and other Asian developing countries, facilitated by financial liberalization, were suddenly reversed, leaving behind collapsed economies, political instability and increased poverty. What the Asian economies have witnessed, he said, is "capitalism in its worst form," marked by both widespread poverty and "the rich with their billions" engaging in currency trading and stock-market raiding. "This is the world of the new millennium," Mr. Mahathir declared. "If we are not careful, if we do not take the job of developing our countries seriously, we may revert to being colonies again."
In Africa's own experience, commented Finance Minister L.V. Ketso of Lesotho, sweeping economic liberalization may have high initial costs, while its benefits may take some time to materialize. "There is reason for many countries to hesitate in fully opening up" to the global economy, he said. President Blaise Compaoré of Burkina Faso, speaking as chairman of the Organization of African Unity, stressed that while Africa needs to break out of its isolation and achieve a greater share of world investment and trade, it should be able to join the globalization process at a measured pace, "as our capacities develop." In particular, progress in sub-regional economic integration within Africa could serve as a "school of globalization" in which Africa's producers can learn how to compete better externally.
Several donor representatives acknowledged the particular problems Africa faces and urged greater measures to tame the volatility and inequities of international markets, as well as more efforts to open up industrialized countries' markets to African exports. "While I consider globalization to be both inevitable and full of promise," declared French Cooperation Minister Charles Josselin, "I also believe that governments must be vigilant actors, to regulate its movement and pace and to soften certain destabilizing effects." As Ms. Eveline Herfkens, the Minister of Development Cooperation of the Netherlands, put it: a stable world economic order must be more than just a "paradise for the winners."
World Bank Vice-President for Africa Callisto Madavo emphasized that such difficulties should not dissuade Africa from further reforms. "It is now even more important," he said, "to reform policy and the institutional framework to enhance Africa's competitiveness on a global basis, and to attract investment."
A few TICAD-II participants expressed disappointment that the Agenda for Action itself did not deal very extensively with external financial issues. But during the discussions from the conference floor, both debt and aid came up repeatedly.
"The debt burden of African countries is unacceptably high and is debilitating to Africa's growth prospects," President Festus Mogae of Botswana said, summarizing the views expressed in a focus group discussion on economic development. Tanzanian Prime Minister Frederick Tluway Sumaye reported that his country must spend 35 per cent of its recurrent revenue on foreign debt servicing, which "denies us the degrees of freedom to spend on the core issues for development. It denies us the opportunity to spend on the social sectors, on infrastructure, etc." In similar terms, argued Zambian Finance Minister Edith Nawakwi, "Unless something is done to resolve the excessive debt overhang, and its considerable drain on the much required resources for development, we can only expect the ideals of economic reform and good governance to remain a pipe dream."
The debt relief that Africa has received so far has been "too little, too late," stressed Ms. Herfkens, who urged more energetic action for Africa's poorest countries, especially those emerging from recent conflicts. Up to now, the response of Africa's creditors has been "simply scandalous," Mr. Mats Karlsson, State Secretary in Sweden's Ministry of Foreign Affairs, told Africa Recovery. Numerous delegates, including from African non-governmental organizations (NGOs), were critical of the Heavily Indebted Poor Countries (HIPC) initiative of the International Monetary Fund and World Bank, arguing that its eligibility criteria are too restrictive.
Mr. Choolwe Beyani, research coordinator of the African Forum on Debt and Development (AFRODAD), challenged the host country, Japan, to accord Africa greater debt relief. In response, Mr. Kunio Katakura, the Japanese government's special envoy to TICAD, noted that Japan had already converted ¥30 bn (about $225 mn) in bilateral African debt into grants. He also recalled Prime Minister Obuchi's pledge at the conference opening that Japan would give "serious consideration" to expanding the number of eligible countries and the amount of debt subject to such relief.
Beyond debt relief and increased foreign investment, Africa continues to require development assistance, UN Economic Commission for Africa Executive Secretary K.Y. Amoako emphasized. "The focus for us and our donor friends," he said, "ought to be not whether [to provide] aid, but how to enlarge and make aid more effective." In a similar vein, Mr. James Gustave Speth, Administrator of the UN Development Programme, noted that official development assistance (ODA) to sub-Saharan Africa had declined in both 1996 and 1997, adding, "It is a tragic irony that, at a time when Africa is poised to embark on a development renaissance, the solidarity of the international community should be found wanting." To translate promise into action, therefore, Mr. Speth argued that the Tokyo Agenda for Action "must be backed by solid, important international commitments to increase ODA for Africa."
Some participants, such as GCA Co-chair Robert McNamara, were skeptical that the donor community would provide more aid. However, several donor representatives announced that they would in fact give more. Ms. Clare Short, the UK's Secretary of State for International Development, reported that her country's development assistance programme is growing once again, after years of decline, with overall allocations set to increase by 9 per cent next year. Since Africa is a priority, she said, aid to the continent "will grow even more." (In 1996/97, the UK disbursed $3.5 bn, of which 38 per cent went to sub-Saharan Africa.)
Mr. Karlsson revealed that Sweden would raise its overall aid budget by 19 per cent over the next three years. Ms. Herfkens said that the Netherlands could not increase its aid level, but would maintain it at around 0.8 per cent of gross national product, among the highest ratios of all donor countries. Prime Minister Obuchi said that Japan would, despite its own severe economic difficulties, "continue to play a leading role for development cooperation in Africa" (see article "Japan aims for quality aid to Africa").
During TICAD-II's first plenary session, President Rawlings of Ghana sharply criticized the common donor practice of tying development assistance to the purchase of goods or services from that particular donor country. The representatives of Norway, Switzerland and the UK all agreed that aid should be "untied," and favoured moves in that direction within the industrialized countries' Organization for Economic Cooperation and Development (OECD).
Aid conditionality should also be eased, suggested Mr. Karlsson, who urged donors to coordinate their assistance programmes with African countries' national budgets, "democratically adopted by national parliaments." According to Mr. James Michel, Chairman of the OECD's Development Assistance Committee, the relationship between donors and African governments should move toward "more ownership and less donorship."
The theme of African "ownership" of national development strategies was prominent throughout the conference. But it should be genuine, Ethiopian Prime Minister Meles Zenawi stressed. Donors, he maintained, often seem to believe the concept of ownership means that "African countries do what the donors want them to do, but they do it without kicking and screaming, they do it voluntarily. That, in my view, is not ownership." In contrast, he said, the Tokyo Agenda for Action uses the term in a much different way, by emphasizing that African countries should first define their own development priorities and strategies and then discuss them with their development partners.
As reflected in both the conference discussions and the Agenda for Action, those priorities express a view of development that looks beyond simple economic growth, and encompasses enhancements in people's social conditions, the resolution of conflicts, and greater steps toward the democratic participation of all citizens.
To widespread agreement, President Mathieu Kérékou of Benin stressed that "without social integration, development will remain fragile and ephemeral," and that progress should be measured not so much by GDP growth rates as by improvements in health, education and "production that meets the needs of the suffering majority." Many speakers repeatedly emphasized the importance of greater investment in education, noting that high literacy rates and skills were key underpinnings of Asia's development advances.
Higher economic growth can help boost incomes and thus reduce poverty, many concurred, but targeted strategies also are needed to promote job creation and ensure that the poorest sectors of society are not left behind. Despite Ghana's improved economic growth, said President Rawlings, "abject poverty is still staring us in the face." Prime Minister Ibrahim Assane Mayaki of Niger stated that the simultaneous pressures of rampant poverty, unpopular adjustment measures, and demands for rapid democratization can engender conflict and make it very difficult for governments to manage.
One plenary session was devoted to discussions of governance and conflict resolution, with most speakers drawing particular attention to the development linkages. South African Deputy President Thabo Mbeki observed that Africa's new democratic systems are fragile, since they rest on complex, multiethnic societies, and he urged Africa's development partners to pay more attention to the socio-economic constraints to good governance. Mozambican President Joaquim Chissano stressed that poverty makes it difficult to realize democracy's full potential and tends to promote conflict. Conflict, in turn, undermines development efforts and scares away potential investors, thus making it harder to reduce poverty. Only concerted efforts on all these fronts can break the vicious circle, many conference participants agreed, adding that African leaders themselves must play a bolder and more active role in spurring human development, resolving conflicts through peaceful means, and improving governance.
African governments must engage in more extensive dialogue with both the private sector and civil society organizations, participants agreed. Among others, Ms. Frene Ginwala, Speaker of the South African parliament and one of the GCA's co-chairs, emphasized the importance of integrating gender issues into all development strategies. She lamented the continued absence of women in decision-making positions, "as evidenced by the platform of this meeting," which was overwhelmingly male.
While the TICAD process has sought to enhance broad international partnership with Africa, a particular aim has been to generate greater Asian cooperation. Since the first Tokyo conference in 1993, trade and investment relations between the two regions have expanded considerably, while Japan has emerged as one of Africa's foremost donors. Throughout the TICAD-II conference, African participants repeatedly thanked Japan for its continuing expressions of commitment to their continent, especially at a time when Japan's own economy is experiencing its worst downturn in half a century.
Photo: Japan International Cooperation Agency
The importance of greater Asian private-sector engagement was likewise highlighted, most notably in a special session of TICAD-II involving leading Japanese businessmen (see second box below). In December, the Republic of Korea is hosting an Asian-African investment forum in Seoul, with participants expected to come from 24 African and 10 Asian countries.
As a follow-up to TICAD-II, Japanese Foreign Minister Masahiko Komura announced at the close of the conference that Japan will help organize a series of meetings in different parts of Africa, to monitor progress on a region-by-region basis. "If private sector-led economic growth is accelerated, through the implementation of the right policies by African governments and their development partners," Mr. Komura said, "I am convinced that the 21st century certainly will be the era of Africa's rebirth."
Poverty reduction, Africa's global integration agreed as prioritiesThe twin themes of the Tokyo Agenda for Action* adopted on 21 October at the Second Tokyo International Conference on African Development (TICAD-II) are poverty reduction through accelerated economic growth and sustainable development, and the effective integration of Africa into the global economy. "The experience of poverty reduction in East Asia demonstrates that rapid economic growth with equitable income distribution over a sustained period of time can help lift the poor above the poverty line," the Agenda declares. Toward that end, the Agenda sets a series of targets in education, health, women's advancement and other areas to promote social development and assist the poor, and outlines the types of actions required by both African countries and their development partners to achieve those goals. Again citing the East Asian experience, it identifies education as central to human capacity building, and thus to accelerated growth and sustained poverty reduction. Noting that "globalization presents additional challenges and new opportunities for African countries," the Agenda stresses that national development strategies should aim to enhance international competitiveness through greater use of appropriate technologies to improve skills and productivity. While African countries should ensure open economies and promote private enterprise, the Agenda says, they also need to strengthen the capacity of public institutions, including through improvements in governance. Africa's development partners can support these efforts through debt relief, expanded market access for African exports, and promotion of foreign direct investment. Regional economic integration within Africa, and above all progress in resolving and preventing conflicts, are also seen as vital to the continent's progress. ---------------------- *The full text of the Tokyo Agenda for Action is available on the Internet at <www.mofa.go.jp/region/africa/ticad2> |
Asian business eyes African opportunities"Our investment climate is as good as in other parts of the world," Malawi Finance Minister Cassim Chilumpha told a group of more than 50 businessmen from Japan and other Asian countries, during a "business dialogue" held on the last day of the Second Tokyo International Conference on African Development (TICAD-II). He cited the high rates of return on foreign investments in Africa, the commitment of many African governments to sound economic policies, and the political stability that prevails in Southern Africa and some other parts of the continent. Despite such positive signs, Mr. Chilumpha said, "we haven't seen foreign direct investment coming in to support these efforts" on a sufficient scale.
Malawi Finance Minister Cassim Chilumpha: Africa has a good investment climate. Photo: UN University There is considerable potential in Africa, however, affirmed Mr. Shigeji Ueshima, President of the giant Mitsui corporation and co-chair of the committee for the Middle East and Africa of Keidanren (Japan Federation of Economic Organizations), the association of leading Japanese enterprises. Currently, he noted, Africa accounts for only 1 per cent of Japanese foreign investment, compared with 22 per cent in Asia. In looking at new opportunities in Africa, Mr. Ueshima said, Japanese investors are most influenced by peace and political stability. "Private business investment flows to peaceful countries, and away from conflict." Generally agreeing with Mr. Ueshima's emphasis, other business executives cited additional considerations. Mr. Motoyuki Oka, Managing Director of Japan's Sumitomo trading corporation, which is involved in exporting African products to the US and other markets, mentioned physical infrastructure and skills. Mr. Leopoldo Clemente, President of Clemente Holdings of the Philippines, said that specific incentives matter less to investors than do the overall growth and openness of an economy, which influence the stability of profit rates. An official of the Malaysian Industrial Development Authority stressed the importance of external perceptions: while many African countries may be at peace and offer good conditions for foreign investors, the tendency of the major media is to focus on disaster and conflict, painting the whole continent with the same brush. "Bad news is free," he noted. "Good news you have to pay for." To attract investors, African countries therefore need to more aggressively project the continent's "good news." |
Strengthening African state institutionsTo better manage the opportunities and risks of globalization, African countries need a "developmental state" with a stronger capacity to formulate and implement policies, argues Mr. Delphin Rwegasira, Executive Director of the Nairobi-based African Economic Research Consortium (AERC). In recent years, however, many African economic programmes have tended to be "donor-driven," and therefore not owned by African governments themselves. As a result, Mr. Rwegasira asserts, such programmes inevitably "fall flat at the end of the day." He was speaking at a public forum on "African Development in the 21st Century" held at UN University (UNU) headquarters in Tokyo on 16 October, and jointly organized with the AERC, which promotes the training of African economists. Many of the African economists, academics and policymakers who took part in the day-long forum were up-beat about the relatively higher growth rates achieved in Africa over the past few years, and most believed that this was a reflection of Africa's own efforts. "What you see is value being unlocked by reforms," affirmed Malawian Minister of Finance Cassim Chilumpha. Numerous participants voiced concern that Africa's higher growth rates may not be sustained. Some worried about the impact of the current global economic downturn, the fact that African investment and savings rates remain low, and the prospect that aid flows may continue to decline. If there were one message that she would convey to the Tokyo International Conference on African Development, set to open three days later, said Ms. Ruth Kagia, a World Bank sector manager for human development in Africa, it would be that "political rhetoric is not enough; it's got to be backed up by resources." Several speakers also expressed misgivings over the challenges of increased international competition, at a time when many African governments are ill-equipped to manage these new demands. In part, commented Mr. A.M. Dirar, director for economic development of the Organization of African Unity, this is because the structural adjustment programmes carried out in many African countries have led to a "wholesale sacking of state institutions." The process of globalization could affect Africa positively, said Dr. Ernest Aryeetey of the University of Ghana, reporting on behalf of a UNU-AERC expert group. But globalization also entails risks and costs, he said, adding that "liberalization must be done with care." Since the private sector alone cannot build up the infrastructure that Africa needs to develop and compete, public-private partnerships are essential. But this requires strengthening Africa's state institutions, he stressed. "We need governments with the capacity to intervene where they are needed." Mr. Thandika Mkandawire, Director of the UN Research Institute for Social Development, reviewed the changing conceptions of the state's developmental role, from the early post-independence assumption that the state was the primary agency of modernization to the view inherent in structural adjustment programmes that the state is a "nuisance" standing in the way of the market. This shift was an extreme one, however, leading to a destruction of African government institutions and the growing dominance of donor agencies in the formulation of basic economic policy. Democracy has made major advances in Africa during this decade, Mr. Mkandawire noted, but often this is a "choiceless democracy," in which elected governments have no right to determine their own budgets, given the conditionalities imposed by external financing agreements. If such constraints persist, he feared, "this will discredit democracy as an option." Mr. Mkandawire -- long an outspoken critic of authoritarian governments in Africa -- argued forcefully that enhancing state capacities is essential for Africa's overall development, not only in the economic sphere, but also for nation-building and improving democratic interaction with society. African governments must be in a position to manage their economies' competitiveness and make integration into the global economy "a deliberate process." Building up Africa's institutions is vital, Mr. Mkandawire stated, "even if that means slower growth," otherwise fast growth may lead to chaos within a few years. "Hopefully," he concluded, "the crisis in Asia will once and for all undermine the dogma of markets, and lead to a serious revisiting of the role of the state." |
