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COMMISSION FOR AFRICA
Produce now, Pay later: Towards a real
Marshall Plan for Africa
While attending the launching of the
report of the Commission for Africa (CfA) titled
“our common interest”
in the impressive building of the British Museum in London on the 11th
March 2005, I felt that something historical is taking place here with Tony
Blair and Gordon Brown in the driving seats. One should be clear. The report is
on Sub-Saharan Africa (SSA). North Africa is not eligible. The overall objective
seems to favour more fairness in doing business with Africa. Unfortunately, too
much importance has been given to Government representatives acting among
themselves. Non-State actors especially the Business community does not seem to
appear very prominently. This could become a serious bottleneck since the
Business community, especially the small and medium enterprises, generates most
of the wealth created in Africa and elsewhere.
1. Shifting the development paradigm
with Non-State Actors
The so-called recovery plan abusively
translated as an
“Africa Marshall Plan”
does not question the overall development paradigm which brought the development
divide so high between Sub-Saharan Africa and Western rich countries. The report
should be praised, among other things, for selected issues such as:
- Full debt cancellation for least
industrialized countries in Africa;
- Doubling development aid up to $ US
100 billions by 2015 through various mechanism such as re-evaluation of gold
reserves at the International Monetary Fund and commitment of industrialized
countries to use this accounting “reserves” to pay off LIC’s multilateral
debt owned to multilateral financial institutions and bilateral donors;
Special global and specific taxations may come into force after a more large
consensus among rich countries;
- Improvement of governance including
tackling corruption in Africa as well as in OECD countries including
multinationals firms;
- Fulfilling the Millennium
Development Goals through a global awareness approach based on the diffusion
of the Report of the CfA as well as building global consensus on issues such
as health, education, poverty reduction, international partnerships, gender
equality in SSA.
- Advocacy for Fair trade for Africa
while condemning western countries double standard positions on agriculture
subsidies, tariffs barriers, institutionalising of trade rules which does
not take into consideration the development agenda at the World Trade
Organisations (WTO),
- Suggesting a better decision making
position for Africa in development finance institutions’ organs such as the
World Bank and the International monetary Fund…
For an official report, the Report
appears as surprisingly straightforward about the sources of Africa's failures,
although emphasis was put on the “Africa” side. Nothing is really new except
that the Report is a kind of memory refreshment for those who made promises some
45 years ago to reach 0.7% of their respective Gross Domestic Product to support
developing countries and failed to do so. The Donors’ Aid fatigue seems to be
over but who said that Africa is requesting Aid only. It is not debatable
anymore that a new partnership restart can take place without additional
development aid. But what are the new conditionalities? The Report insisted on
practicing good governance, democracy, free trade, open society culture and
would like to enter a new deal with the exactly the same leaders, at least some
of them, who specialized themselves in playing lip service on those issues.
Could it work with the same type of actors only?
How can non-State actors be involved and
contribute to the success of this revitalisation proposal for Africa? The
operational logistics for implementation of the Report still needs to be
clarified with the “CfA implementation committee”. Will this framework plan
bypass NEPAD and the African Union’s strategic vision and various proposals for
which the same donors did not demonstrate any financial commitment yet? It is
true that the African population did not endorse NEPAD vision and some African
countries are in the process of improving this democratic deficit situation. Due
to the difficulty to respond to those challenges, African Non-State actors
including the African Business community (with the Diaspora) should be vigilant.
They should not be used again as part of a UK public relation (PR) exercise
which could end up as an expensive clever “window-dressing operation”.
The report of the CfA should be
acknowledged as a UK led courageous attempt to follow-up on the African Heads of
States’ new collective vision structured around NEPAD and its Peer Review
Mechanism.
Since the launching of the Marshall Plan
for Europe in 1947, the Brandt Commission in 1980, the African Lagos Plan of
Action in 1980 and the World Bank/Berg Report in 1981, Africa was alternatively
considered as a reserved continent or a continent of reserves for rich
countries. That particular unwritten western understanding of the division of
Africa’s continent does not seem to be really questioned in this report.
Difficulties to implement some of the recommendations in Francophone Africa are
much higher than in Anglophone or Lusophone Africa. The regional dimensions
which appears to be the cornerstone of NEPAD and African Union new approach
seems also to be diluted in the quest for fostering co-operation between
super-powerful groups and individual African countries. Would it not be more
innovative to structure the Report of CfA on a sub-regional basis and ensure
that negotiation for implementation takes place between regional groups such EU
versus SADC, or EU versus ECOWAS including non-State Actors? Putting everything
in perspective, the amount received by 15 European nations (individually and on
a regional basis) through the Marshall Plan in 1947 and onwards was $ US13,325.8
millions. The so-called African Marshall Plan is expecting to reach $ US 75 m in
year 2015 for more than 47 African countries.
Supplying on favourable terms, rich
countries with raw materials from developing African countries competing among
themselves seem to be the underlined assumption in the CfA. What is new is the
political will of UK to do it in a fair, transparent and eventually equitable
manner. Trade Policy needs therefore to be reviewed and WTO too. Failing to do
so, summarizing the CfA report, as pull out from Gordon Brown Africa’s recovery
plan under the slogan “live now, pay later” is definitively not the position of the Africans, nor that of the African Business
community.
Nobody could agree to transfer the debt
burden to the next generation if possibilities do exist today to reengineer the
present one-way development paradigm. Post-colonial approaches in business,
post-Washington consensus, Post-Structural adjustment converted into strait
jacket package Poverty Reduction Strategy Programmes need to be entirely
revisited with alternative thinkers and Private sector representatives dedicated
to corporate social responsibility. Getting everything “right”
with only the same governments official might not be possible, nor effective.
The challenge raised by the Report is just huge and needs everybody’s
contributions.
The shift in the development paradigm
should enable the view of all Africans to emerge. Selected African experts and
selected Government officials cannot represent the view of non-State actors. It
would be suggested that the African Business community be given the chance to
react to some of the proposal and have them incorporated at the operational
level before getting the
“blessing” or not of the
G8 and the European Union. A propos, why could other alternative sources of
funding not be tapped? Several oil countries might be interested in building
capacity and capabilities in Africa especially in the productive sector. A
special window should be opened in the International Financial Facility if the
CfA is scheduled to build an effective and more balanced international community
ownership. Supporting the African Productive Capacity Initiative as well as its
flexible Facility should serve as a good example.
As the CfA is also serious about
implementation, the involvement and the support of Non-State actors especially
the African Business community could become the cornerstone of fulfilling the
high expectations placed mainly on government’s officials both from rich and
poor countries.
2. Towards shared economic growth in
Africa
With 2.4% of world trade export and 2.2%
in world trade import in 2003, Africa is not an equal partner in the global
system. As a consequence, Africa is of no strategic importance to the Western
countries. This could explain why the Commission for Africa’s report is
concentrating more on assisting than helping create operational capacity and
capabilities in a hostile business environment in Africa. Don’t give me a fish,
but teach me how to catch fish has been a Chinese Leader’s slogan for years.
Because of the cold war and competition between the Western and the Eastern
countries on dogmatic approach to development, nobody noticed that both parties
have frozen the possibility to improve Africa’s technology upgrading for a while.
Will this now become a real priority for the UK led original attempt to move the
development agenda forward? Yes, if again Non state actors are directly involved.
It is therefore clear that aid, trade,
and investment without production might not be sustainable in Africa. Africans
need to produce now and pay later. Effective Partnership cannot take place if
NEPAD, African Union and the African non-State actors including the Business
community (local and Diaspora) are marginalized or left out. The overall
approach should focus on generating wealth and decent jobs in Africa and not
satisfying the reduction of extreme poverty only. With the general consensus
that the MDGs will not be reachable in 2015 but between 2050 and 2070 depending
on the statistical sources, it could be of interest to revisit the MDGs itself
and ensure a more proactive role to the Africans themselves which cannot be
represented by selected Government officials only.
Why Gordon Brown, one of the most
dedicated western official committed to get Africa believe in: “Live now and pay later”.
The share of Africa in the world total manufactured value added which stands for
the capacity of Africa to produce is structurally low and went from 0.7% in 1990
to 0.7% in 2003 and best estimation is around 0.8% in 2004. It is therefore
crucial that the report of the Commission for Africa (CfA) concentrated more on
the role of Business in the global production network, the generation of value
added by Africa and its Diaspora. Falling to do so, taking proactive actions on
debt reduction, improvement on issues such as health (fighting aids,
tuberculosis and malaria), education, corruption, governance, trade, poverty
reduction, peace and security may again not serve as a leverage for Africans
standing on their feet but rather favouring a new convivial (?) dependency
towards western countries. Besides, UK Commission acknowledged the fact that
with globalisation, partnering with Africa’s leaders should gradually move from
dependency to interdependent relationships.
With the possible consequences of
poverty on Western countries such as a large flow of immigration, control of the
proliferation of diseases, eventual new terrorism due to asymmetrical wealth
creation between rich and poor countries, Africa became a question of global
security per default. UK leaders decided to build on the New Partnership for
Africa’s Development (NEPAD) vision. It does not stop the UK government to use
the report as a public relations exercise to cover some of its disappointment
results in Africa and Iraq. Internal leadership fight between the Chancellor of
exchequer and the Prime minister should also not be underestimated. Nevertheless,
Tony Blair, British Prime Minister, seems to be serious about his goodwill to
highlight Africa as the “scar on the conscience of the world”. Unfortunately,
the challenge does not lie in analysing Africa’s situation as a means to
convince G8 or European Union leaders, but more in how to implement jointly with
Africans, especially the non-State actors of which business community and
Diaspora, operational projects which could improve the level of technology
content, ensure more efficiency in management in a conducive environment, thus
helping Africa to recover its dignity and economic independence.
Nobody in Africa really refuses to pay
its debt back. It does not also make sense really to write off debt for corrupt
African regimes whose selected members are hijacking major productive capacity
entities in the country. As the result, economic growth in Africa does not
necessary lead to improved well-being for the population. Linking growth and
poverty reduction as indicated in the CfA report might therefore be misleading.
The overall development paradigm needs to be questioned because it is the same
economic growth approach, which results in shifting Africa from roughly 7.45% of
the world trade in 1948 to 2,3% in 2003. That cannot be considered as a western
success story and the usual auto-congratulation of political leaders should
stop. One of the reasons of this dreadful result is the marginalization of and
the lack of support for the local business community and relevant infant
industries. Most of the debt owned to the local private sector is usually due in
local government administration. The fact that international debt service is
paid in priority to international finance institutions which are putting their
accounting books in order meanwhile making profit at the expense of poor
Africans. Meanwhile debts owned to local entrepreneurs are just forgotten, thus
contributing to the neutralisation of the emerging of a strong local industrial
capacity interested in the contribution to poverty reduction.
In the report of CfA, Tony Blair and
Gordon Brown are promoting the NEPAD/African Productive Capacity Initiative,
which is based on a shared economic growth vision. Nevertheless, too much
attention is still being given to “improving trade between Africa and western
world on a more fair, equitable basis. Does is mean that the Report of the CfA,
if funded by G 8 and European Union, will reverse drastically the downstream
terms of trade of African commodity? From which fair trade are we talking about
when for almost 30 years price of sugar fell by 77%, cocoa by 71%, coffee by 64%
and cotton by 47% while military expenses and unfair subsidies in Western
countries are following an upstream trend? The NEPAD vision is incorporated in
the Report. The expectations are high, and future disappointment from African
Non-State actors might be high too. Not because, some aid money will flow, some
foreign direct investment (FDI) might stop-over in Africa ($ US 7 billions to
Africa in 2002) as compared to Asia ($ US 57 billions), but because, our “common interest”
seems to offer a non-written priority to the medium-term interest of the western
countries over the medium-term interest of African Non-State actors.
The forefront priority is to enable
Africans to “fish” and
not get aid to buy some canned fish caught by modern western vessels operating
near the African coasts. Therefore Africans should produce first, trade and pay
later. With selected rent seekers Governments still in place, the unwritten
“embargo” on African countries with bad governance records might not be
workable. Some western countries still continue to do business with them. The
corruption issues in Africa are as difficult as the answer to the question
whether the chicken or the eggs comes first. The role of the private sector, the
role of African Business leaders including those from the Diaspora needs to be
taken into consideration while structuring the implementation committee of the
CfA. “Erasing the scar”
should start with a reconciliation conference with appropriate stakeholders.
It is a controversial and populist issue
to launch a development paradigm based on “debt forgiveness”. It does favour
indiscipline. Would it not be wiser to “subsidize” the unacceptable interest
rate calculated on any of the capital amount lend to Africa? Would it not be
more operational to open the door for a positive discrimination initiative and
provide incentives for firms and Development finance institutions dedicated to
corporate social responsibility and use Africans and its Diaspora in their human
resource policy instead of paying just very high salary to expatriates? To make
it brief could we not think about a new development paradigm based on a
glocalized (global and local) approach to growth called “shared growth”? Why
should social cohesion in Africa be sacrificed at the expenses of the population
because of contradictory interest among powerful global productive public and
private entities?
Yes, removing rules of origin and trade
barriers will contribute to additional creation of African productive capacity
and capabilities in partnership with western companies. But again, when it comes
to opening the western countries markets and improve African goods in terms of
quality, norms, delivery, and etc. western countries’ businesses leaders appear
to be more reluctant. Subsidies to non-competitive farm production in western
countries are not going to be dismantled fully in the near future. This must be
a dream if African leaders still believe in it. is the sharing of economic
growth and profit with Africans on a fair basis becoming a hot issue?
Till now, with the rules of origin and
western protectionist conditionalities, any businessman or businesswomen based
in Africa interested in getting expertise or equipment from abroad, was just
prevented from doing so. The AGOA, the American Growth Opportunity Act, in
Lesotho in the cotton/textile and apparel value chain is becoming a real success
because George Bush accepted to postpone the original deadline (2008) of the
AGOA trade preferences agreement to 2015. He understood that productive capacity
is the key to leverage on shared economic growth in Africa. To facilitate it,
rules of origin were removed. Should all G8 and European Union Government not
follow this approach without questioning whether each of them should get
compensated for it or alternatively run for “exception” as it appears with
European Union led package on “Everything but Arms”? Failing to do so,
this will delay the whole commitment and the implementation of high expectations
raised in the name of “common interest”.
3. Exploring the Way Forward
In addition to most of the valid recommendations made in the
report, the following main points should be considered as crucial if bottom-up
approach and African non-state actors and people’s views are to be considered:
- Ensuring gradually that the CfA
implementation committee be enlarged to Non-State Actors and decentralised.
It should gradually become a co-operation between NEPAD and the organized
private sector representatives such as the African Business Round Table a
one-stop shop for public-private partnership support to Africans with the
objective of creating decent job and enhance well-being in Africa;
-
Concrete jointly agreed projects and
programmes favouring regional economic integration should be listed under a
contract to be signed by concerned parties for implementation;
-
Building and interconnecting
databases with available technology and know-how of interest to Africans
with the aim to facilitate job creation, investment and business
opportunities;
-
Establishing an alternative think
thank highlighting Non-State actors views including business community and
get them to reach consensus with Government actors think tank on operational
proposals of interest to people both industrialized and least industrialized
countries;
-
Ensuring that projects and
programmes favour skills upgrading in order to build capability and capacity
in Africa. In the business areas, one should always attempt to promote
activities and partnerships where the upgrading of technology content is
given as a priority;
-
Promoting the role of the African
private sector through various mechanisms including decentralized
cooperation where decisions to support CfA could take place directly between
for example a Mayor of London or Dublin and any of the African local
administration, some for mayors of rural areas.
-
Debt owned to the Business community
at the national and regional levels in Africa should be cleared at the same
level as any international debt services.
-
Interdependence and social cohesion
in Africa should be a fundamental objective of CfA and independent
public-private team of experts should be in a position to measure progress
made after each fiscal year.
This could happen with ownerships and
commitments if a conference between Non-state actors and Government officials
from both western and Sub-Saharan countries takes place to clarify the
implementation strategy focused on concrete “new deals” and contracts. Failing
to do so, one should not be surprised in a very near future that the
structural scar created in Africa becomes even more visible with its costly
consequences on security and peace.
Dr. Yves Ekoué Amaïzo
Author and Strategic Economist at UNIDO
(The paper is prepared in his personal capacity)
1. General George C. Marshall,
Secretary Of State, "Address At Harvard University <http://www.loc.gov/exhibits/marshall/m9.html>,"
June 5, 1947. For European Recovery: The Fiftieth Anniversary of the Marshall
Plan <http://www.loc.gov/exhibits/marshall/marsintr.html>: On June 19, 1947,
representatives of 22 European nations met at the invitation of the British and
French foreign ministers to participate in the design of a plan for rebuilding
war-torn Europe. In a Harvard University <http://lcweb2.loc.gov/ammem/today/sep14.html>
commencement address <http://www.loc.gov/exhibits/marshall/mars1.html> two weeks
earlier, U.S. Secretary of State George C. Marshall had called for a massive
European aid package designed to stabilize the world economy and discourage the
spread of communism. Over 12.4 billion dollars were transferred to Western
Europe under the Economic Recovery Program known as the "Marshall Plan." Not
completely altruistic, the legislation <http://www.archives.gov/exhibit_hall/featured_documents/marshall_plan/index.html>
creating the plan specified aid dollars be spent in the U.S. <http://www.loc.gov/exhibits/marshall/mars11.html>
Nearly every Western European nation participated in the recovery effort.
Although inflation proved a serious side effect of the program, within two years
many countries had reached or exceeded pre-war levels of agricultural and
industrial production. By encouraging European economic integration, the
Marshall Plan fostered the creation of the European Economic Community of the
1950s--the precursor to today's European Union. See http://lcweb2.loc.gov/ammem/today/jun19.html
2. The Brandt report properly entitled “North-South: A Programme
For Survival”. It was presented to the Secretary General of the United Nations
in February 1980 and was published in March 1980. There have been criticisms of
the proposals in the Brandt Report that it is not innovatory and not radically
new in many of its recommendations.
3. Southern African Development Community
4. Economic Community of West African States
5. Source: Wikipedia
6. Anver Versi, “Gordon Brown’s Africa Recovery Plan:
Live now, pay later”, in African Business, n. 306, February 2005, pp.
14-20.
7. UNIDO, Africa Productive Capacity Initiative: From Vision to
Action. Main Report, 16th CAMI Meeting, Vienna, 28 November 2003; see http://www.unido.org/file-storage/download/?file_id=25984
8. WTO, International trade statistics, 2004, p. 76.
9. UNIDO, International Yearbook of Industrial Statistics,
2005, p. 34.
10. Yves Ekoué Amaïzo, From dependency to interdependency.
Globalisation and marginalization. A chance for Africa? Publisher by L’Harmattan,
Paris, 1998, 432 pages, available only in French.
11. WTO, Annual Report 2003, p. 32.
12. World Bank, Global Development Finance 2004, pp. 6
and 26.
13. The Economist, “Erasing the scar”: Toni Blair’s Commission
for Africa, March 12th -18th 2005, p. 77. |
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