REACTIONS OF THE
LEAST DEVELOPED COUNTRIES TO THE NEW APPROACHES AND
INITIATIVES
BEING TAKEN TO ADDRESS THEIR NEEDS,
AND THE ROLE OF
THEMAJOR ACTORS TO DEVELOPMENT
By
HIS EXCELLENCY MR BENJAMIN WILLIAM MKAPA,
PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA
BRUSSELS, 14 MAY 2001
Mr. Chairman;
Your Majesties;
Excellencies Heads of State and Government;
Honourable Ministers and Leaders of Delegations;
Distinguished Delegates;
Ladies and Gentlemen.
The
reason we are gathered here today, at great expense in terms of time and money,
is because previous efforts at addressing the special development needs of
Least Developed Countries have failed to meet our expectations. Within nations,
and between nations, the general trend has been one of the lowest income group
getting worse off, not necessarily in absolute terms, but certainly in relation
to the prosperity of the richest segment of humanity.
The
wealth gap between the Least Developed Countries and the developed ones is not
narrowing; it is increasing along with all the other "gaps," such as
the digital divide, the health gap and the educational and scientific gap. The
list is long. As a result, while 30 years ago there were only 25 countries
categorised as Least Developed Countries, today there are 49 of us in this
unenviable club, from which we all want to leave, but in which we remain stuck.
How to get unstuck has to be the primary purpose of our being here.
We in
the LDCs are encouraged that our development partners, and the institutions of
global governance such as the United Nations System and multilateral financial
institutions, remain engaged with this challenge we all share, the challenge to
fight degrading and dehumanising poverty in the midst of unprecedented global
prosperity. Poverty breeds insecurity, uncertainty, vulnerability to internal
and external shocks, and powerlessness. In that regard, it is important to keep
alive our own obligation as LDCs, as well as that of the international
community and of our development partners, to take special measures in
addressing the special needs of the poorest and the weakest. And here I wish to
acknowledge the role of local and international NGOs that have kept up the
pressure and ensured that the special needs of the LDCs are not put on the back
burner in the policy kitchens of the wealthy and powerful. The pressure must be
kept up; for the work is far from done.
In that
respect, I also wish to pay tribute to Mr. Rubens Ricupero, Secretary-General
of UNCTAD, for his initiative to establish the High-Level Panel for the Review
of Progress in the Implementation of the Programme of Action for the Least
Developed Countries for the 1990s. I thank and commend the Panel for their
work, which has given this Conference, and all of us as individual or national
actors, a bearing of where we were, where we went wrong, why, where we are, and
what needs to be done if the present conference is not to be added to the list
of unsatisfactory performances by its predecessors. And here I should also like
to mention and commend the major evaluation of aid effectiveness done recently
by the World Bank. As I see it, we need to ask ourselves three basic questions:
· First, do we now know, in sufficient detail and clarity, why
many earlier approaches and initiatives failed - be it the Programmes of Action
of previous LDC Conferences, or all the other global summits on education, on
environment, on poverty, on health, on habitat, on women, on children and
others. All the targets that came out of the Conferences and Summits were
noble, and at the time we agreed on them, we believed we were all committed to
play our different but complementary and coordinated roles. We failed. Was the
problem the goals, the approaches, the initiatives, the role players, or their
co-ordination?
· Secondly, if with the help of the Report of the Panel we believe
we now know what went wrong, are we equally certain that the new approaches and
initiatives we are launching here, and the roles we assign to the different
actors, relevant to the solution needed to effectively deal with the previous
problems; and, can they be relied upon to increase the speed of implementation
to make up for lost time, and to produce the effectiveness and efficiency
needed to attain that speed?
· Thirdly we need greater introspection by all the actors,
especially governments, in both rich and poor countries, regarding sufficient
commitment to these new approaches and initiatives. The report of the Panel has
shown that lack of, or insufficient, political will is a major contributory
factor to previous failures. Are we now sufficiently driven to
engender the necessary political will, among all actors, to not fail again?
How determined are we to nurture a true partnership, a partnership
based on mutual trust and respect, openness and fairness, willingness to share
credit for success and shared responsibility for failure? Are we ready to look
forward together, to work better together? For reciprocal recriminations will
never put food on the plate of the hungry, nor take their children to school.
Mr. Chairman,
Let me
now, from the LDC perspective, look at some of the new approaches and
initiatives, and how I believe they can contribute to making this Conference
succeed where others have failed. Time is short, and I can only dwell on a few.
The
first is genuine local and national ownership, an ownership that is
facilitated and strengthened through partnership with external
development partners, and local NGOs, and involving issues such as capacity
building for planning, implementation, co-ordination, monitoring and
evaluation. Here I think I am uniquely suited to speak on the subject of
ownership and partnership because in terms of Tanzania's relations with
bilateral, but especially multilateral development partners, the pendulum of
our engagement has swung from one end, of mutual suspicion and confrontation,
to the present stage where national ownership of policies, goals, plans,
programmes and priorities is increasingly becoming the accepted way to relate
to each other. It is possible to evolve such a relationship, but it cannot
happen overnight.
We
understand the concerns of our development partners - whether political,
technical, or administrative. Yet greater political commitment is needed, both
at the bilateral and multilateral level, to cede more and more control over
policy, planning and prioritisation to national governments. And within
nations, more of such roles should devolve to local governments. The war on
poverty is essentially ours, and we know our people and the environment
obtaining locally. What we need is a favourable external environment and
implementation assistance from other development actors and partners.
The second
is with regard to new initiatives on the debt burden, which is truly a
drag on whatever national efforts we take to promote growth, development and
capacity for poverty reduction. It is no secret that the debt burden, in the
context of the economic reforms and structural adjustment implemented by LDCs,
in fulfillment of our side of the commitments made at LDC II in Paris, has
contributed significantly to reducing, stagnating or producing very low
improvements in human development.
We were
hopeful, when the G7 countries agreed to launch the enhanced HIPC Initiative,
that this burden would soon be lifted, or at the very least, significantly
lightened. Alas, few LDCs have been able to access the facility two years
later, and quite a number, like Tanzania, are somewhere between something
called "decision point" and "completion point," despite
years of consistent reform and adjustment. It is as if the very few remaining
conditions have far greater weight in determining the "completion point"
than the overwhelming successful conclusion of other conditions. If this trend
persists, we will still have a very long way to finding a final and sustainable
solution to the debt problem. Fears also persist on whether the enhanced HIPC
Initiative will ever be fully funded.
Mr. Chairman,
Good
words are not enough. All development actors have to play their roles. Most of
the LDCs have tried, under very difficult conditions, to play their part
between Paris in 1990 and Brussels today. Yet the commitments from Paris on
debt relief have produced little effect on the ground. Indeed, World Bank
statistics show that the debt burden has actually worsened. Since Paris, the
nominal value of the debt stock of LDCs as a whole rose from $ 121.2 billion in
1990 to $150.4 billion in 1998. And, although not all LDCs fully service their
debt (we in Tanzania are unable to do so) the total debt service paid by LDCs
rose from $4 billion at the time we met in Paris for LDC II, to $4.4 billion
two years ago.
What is
worse, even the full deployment of pre-HIPC debt relief mechanisms could not
create a noticeable dent in the debt problem. Almost two thirds of all LDCs are
still faced with unsustainable levels of external indebtedness. The Programme
of Action we will agree upon here will begin with a heavy debt overhang. Unless
all development actors are willing to do something much more than what has
already been done, something much more dramatic in scope, content and effect,
ten years from today we shall be assembled somewhere else reflecting again on
yet another failed global effort; a very well intentioned effort, but
one which is flawed from the beginning, and will not fly.
Mr. Chairman,
I am
sure that out of Brussels will come other commitments by rich industrialised
countries to increase the flow of concessionary external resources needed to
facilitate efforts by LDCs to reach internationally agreed development and
other poverty related goals. A similar promise was made in 1990. But while it
is widely acknowledged that the 1990s witnessed unprecedented commitment, in
reform and practical terms, among LDCs towards creating the right domestic
policy environment in terms of democratic governance; in terms of
macro-economic policies, fundamentals and stability; in terms of opening up to
the external world; and in terms of liberalising product and factor markets
through privatisation and deregulation, no corresponding increase of
concessionary external resources was evident during the period for the LDCs as
a group.
As the
Overview of the Least Developed Countries 2000 Report by the UNCTAD
Secretary-General has shown, in practice, the share of Development Assistance
Committee (DAC) members countries ODA earmarked for LDCs in relation to their
GNP fell from 0.09% in 1990 to 0.05% in 1998, with only Denmark, Luxembourg,
The Netherlands, Norway and Sweden meeting the targets of the Paris Programme
of Action. According to the Report, net ODA to LDCs, in real per capita terms,
has dropped by 45 percent since 1990, and is now down to the levels of the
early 1970s.
What is
even more worrying is that even the more positive developments in ODA to all
developing countries that began to reverse the trend of the early and mid1990s
has once again relapsed into another downward trend. Provisional OECD data
recently released show that ODA has fallen from USD 56.44 billion in 1999 to
USD 53.06 last year, a drop of USD 3.38 billion in one year only. While there
was a real 6.5 percent increase in ODA from 1998 to 1999, there has been a 1.6
percent decline from 1999 to 2000. Against the United Nations target of OECD
countries contributing 0.7 percent of their GNP to ODA, the average DAC ratio
has fallen from 0.24 percent in 1999 to 0.22 percent last year.
It is
under these circumstances that we meet here in Brussels to make new commitments
to fight poverty in LDCs in the next 10 years. Clearly, we in the LDC have
reason to be sceptical if the targets we agree upon here stand a better chance
of success than those made in Paris 10 years ago. We need more reassurances
from our development partners.
Mr. Chairman,
Another
thing that deserves mention is the continued initiatives to improve aid
coordination, targeting and sequencing, as well as the imperative to untie
aid. All these are necessary if we are to increase the efficiency and
effectiveness of aid, and the new approach of comprehensive and integrated,
rather than piece-meal development initiatives, and achieve more development
for each unit of currency allocated to ODA. I am aware of the problems that
some governments have in fully embracing this initiative. Ultimately it is a
national decision, with due regard to each country's circumstances. But I want
to pay tribute to those that are determined to cross the rubicon, of which the
United Kingdom played a key role in trying to generate a coherent OECD position
on untying aid. Sadly, that central element in the new approaches and
initiatives failed. I want to thank all those DAC member countries that have
crossed that rubicon. I am encouraged to note, however, that even those
countries that today have problems in untying aid to LDCs do realise and
acknowledge that there are certain negative effects of their position -
including in terms of raising costs of development projects, reducing competition,
and the suppression of the development of the local private sector in LDCs.
Mr. Chairman,
It is
acknowledged that trade, and the global framework we have put in place to
promote and regulate it, are also important development actors. As LDCs we are,
nevertheless, pleased that the term "Trade, Not Aid" is less used
now. For, clearly it is unrealistic to expect that whatever benefits of trade
we might get in opening up to the external world can offset the need for
continued concessionary aid to LDCs. But that is not to say we are against
globalisation. Far from it. We know that LDCs can benefit from globalisation
and free trade, but only where circumstances are right, where the different
starting points are recognised and provided for, and where special measures are
taken to remove supply side constraints through partnerships that involve
enhanced inflow of concessionary external resources, through human development,
and through preferential access to the markets of rich countries.
Recent
studies - and the UNCTAD report on LDCs is one such study - have shown that of
all developing countries, LDCs have shown the greatest commitment, in practical
terms, to free trade in goods and services. We have taken the leap of faith,
even as we know we are joining a game whose rules were set by old players we
find already on the pitch. We have taken painful measures, against a wave of
protest from our own people, to open up our economies. ME statistics show that
the vast majority of LDCs have average import tariff rates that are below 20
percent, with little or no non-tariff barriers. UNCTAD data shows that in the
1990s only 9 out of 45 LDCs had strict controls on remittances of dividends and
profits, and capital repatriation.
But
what do we get in return for compliance? What is there to show our domestic
development actors? Not much. The asymmetry in effective power relations
between LDCs and the rich industrialised countries is such that no amount of
goodwill on the part of our external development partners can offset the effect
of the baggage of huge disadvantages and structural weaknesses with which LDCs
enter the contest, being told that the playing field is level, when we all know
it is not level in practical terms.
Mr.
Chairman,
LDCs
are not rejecting the imperative of opening up to globalisation. But the fact
is that LDCs cannot benefit from globalisation before they reduce poverty
significantly. For, it is essentially poverty that lies at the heart of the
supply side constraints that make it impossible for Tanzania to fully access
the benefits of such preferential trade arrangements such as AGOA of the United
States, or "Everything But Arms" offered by the European Union.
When
the Uruguay Round of trade talks was coming to the end, I had the feeling that
rich industrialised countries were putting the cart before the horse.
Subsequently, and even at this Conference, it seems the horse has been taken
from the back to the side of the cart. Maybe some movement can take place in
that position, such as movement from side to side, or shaking. But the only way
we can move forward, with full speed, is when we all put the horse of poverty
ahead of the cart of globalisation in terms of our priorities. It is success in
the war on poverty that will pull the benefits of globalisation for LDCs.
For me,
this imperative is as clear as daylight. It is only success in the war on
poverty that will increase jobs and incomes in LDCs on the one hand, and create
an effective demand, and a market, for all the goods and services we are asked
to open our doors to, on the other.
It is
only a successful onslaught on poverty that will reduce environmental
degradation and pollution that remains a priority in a globalising world.
It
is only economic growth and broad based development that will reduce LDCs
negative contributions to globalisation, such as crime, drugs and illegal immigration; and instead increase LDCs positive
contribution in terms of competitive goods and services.
It will
also contribute to peace and stability, creating a conducive environment for
the investments and capital flows we are required to open our doors to.
It will
also enable us to acquire the technology that is so necessary but which rich
countries find it so difficult to share with us unless we pay up front.
Mr. Chairman,
Among
the development actors that help us in the LDCs to ameliorate the worst
manifestations of poverty are those in the United Nations System. Many have
helped us with basic issues of health, of education, of the special problems of
refugees and refugee hosting communities, and recently of the necessary focus
on capacity building at central and local government, on governance, on
grassroots and national ownership of the development initiative, and on building
the capacity of other nonstate actors in development, such as local NGOs.
Regrettably,
the commitment of some developed countries to the work of the United Nations is
less than what we in the LDCs consider necessary. Refugees in Tanzania have had
to have their food rations cut for lack of resources contributed to the UNHCR
Important and critical projects in poverty alleviation and capacity building
have had to be shelved for lack of resources. Where would LDCs be without UNDP,
WHO, UNESCO, UNICEF, FAD, UNCTAD, UNIDO, and the like? On belief of LDCs I
plead for more, not less, resources for these important actors in the
development of our countries, and the war on poverty. New approaches must not
sideline the contributory and co-ordinating role of the UNDP and other UN
agencies.
Mr. Chairman,
In
terms of the commitment we have to mobilise financial resources for
development, there is an urgent need to increase the mobilisation of domestic
resources and the inflow of foreign direct investment. Governments in LDCs have
the responsibility, and they are ready to shoulder that responsibility, to
create the necessary policy environment to facilitate the accrual of both
sources of development finance. But it is only realistic not to put too much
hope on domestic resources in the short term, taking into account the magnitude
of investments necessary to create an impact on poverty.
If we
are to create the virtuous circle between increased exports, investment and
savings, much more needs to be done in partnership between all development
actors. As mentioned earlier, the supply side constraints we have, and which
are a deterrent to private investment, can best be addressed through a combined
onslaught involving LDC governments and increased ODA resources. Otherwise,
LDCs will not be competitive in attracting foreign direct investment (FDI).
It is
true there have been some increases in FDI flows to LDCs in the 1990s, and
Tanzania is an example of one of the few LDCs that have benefited. But a deeper
analysis of the investments to LDCs shows that most are investments in
exploration and exploitation of finite natural resources, such as in
hydrocarbons, and in nuning. And sometimes, we have to offer too generous
incentives to get the attention of major investors.
But,
generally speaking, long-term capital inputs into LDCs as a whole have declined
by 25 percent in nominal terms since 1990, while those to other developing
countries have increased dramatically in the 1990s. As a result, the share of
LDCs in long-term net capital inflows to developing countries has fallen from
18 percent in 1987 to less than 4 percent. The share of net FDI to LDCs has
fallen from 3.6 percent in the late 70s and early 80s to 1.4 percent in the 1990s.
So, I repeat, private capital flows are also an important actor for
development, but for us to be able to access this source of capital, more
concessionary financial flows are needed to address the supply side
constraints, especially those related to infrastructure and capacity building.
Mr. Chairman,
Another
positive development I want to mention is the new commitment to consultations,
and to a broad-based participatory approach towards development. It is an
approach we in LDCs generally support and encourage. Within countries we see
more participation by non-state actors in discussing policy options and
priorities, and strategies for development and poverty alleviation. It is,
however, important to build the capacity of the civil society, and of NGOs, if
such a consultative process is to bear fruit, and not become a stumbling block
to faster progress in development planning, implementation and evaluation.
It is
also important that a line is drawn between Governments, with legitimacy to
lead, obtained through a democratic process, on the one side, and NGOs and
other representatives of civil society on the other side. Governments are fully
responsible and accountable to the people; NGOs are not. And while they are our
very important partners, that distinction must not be allowed to blur.
In
relation to our external partners, we note with satisfaction the increasing
willingness to listen to LDCs by the Bretton Woods institutions. The extended
joint visit by the World Bank President and IMF Managing Director to Africa,
where 34 of the 49 LDCs are, has sent a powerful message of a new approach in
relations and partnership between LDCs and these institutions. But the trend
also manifests itself gradually in other organisations and bilateral
development partnerships. Even the preparation of the present draft Programme
of Action has been a bottom-up approach that enabled broader participation and
consultation among the various actors nationally, regionally and globally. This
is a good beginning, which we must now build upon and expand.
Mr. Chairman,
We need
not only a more action-oriented and results-driven programme of action that
will truly reverse the poor performance of the previous two conferences, but
also clear targets, with firm time-frames and performance criteria, determined
distribution of roles, as well as an effective mechanism for follow-up,
monitoring and evaluation.
Though
the past performance has not been good for LDCs, this Conference should focus
on the future, and determine the concrete actions all actors must take to
unlock the potential of all those living in poverty, those vulnerable to
internal and external shocks, and those that risk being marginalized in a
globalising world. Above all, we must find together the key to ensuring the
development targets set for the year 2015 are fully met.
We have
deliberated long enough on this subject and we should now have adequate
understanding of what is required. I will emphasise three aspects regarding our
future actions on this matter.
First,
we in the LDCs have to face our responsibilities. This is our challenge; we
must rise to it. We must own the process. We should continue to establish the
appropriate frameworks for economic growth, poverty eradication, peace and good
governance. This, we accept, is one of the pre-requisites for rapid growth and
sustainable development.
Secondly,
in order to attain the global targets of eradicating at least 50 percent of
extreme poverty by the year 2015 we need genuine partnership and support from
our development partners. We need significant, comprehensive, and sustained
support.
·
Significant support is necessary to accelerate
the momentum for growth that will enable LDCs to emerge out of the vicious
circle of poverty;
The mix
of assistance is important and should be negotiated objectively. It is,
however, necessary to stress the unique importance of ODA to priority areas
determined by LDCs. Other important forms of support should include deeper debt
relief, including cancellation, by multilateral and bilateral creditors, as
well as increases in concessionary loans and facilitation to access global
markets.
Thirdly,
any future programmes for the LDCs should include an effective follow-up and
monitoring framework at the national, regional and global levels. This is
necessary if we are to evaluate our performance objectively and periodically
and take corrective measures in time. The desired framework should be able to
assess the performance both of the LDCs and their development partners based on
what they have been committed themselves to-undertake.
It is
my expectation that these concerns will be reflected in the Brussels Programme
of Action for LDCs, 2001- 2010.
Mr. Chairman,
The symbol for this Conference is two hands cradling our common
planet.
In the
Millennium Declaration adopted in New York last December, world leaders agreed
to spare no effort in ridding the world of "dehumanising poverty."
But we need a little soul-searching. Are we ready to do more so that this
Conference can be better and deliver more than its two predecessors?
This
Conference is asked to live up to that commitment and show, in practical terms,
that the hands that cradle our world are warm and caring, not cold and
indifferent. The LDCs are ready and willing to play their full part.
I thank you.