Where next? An agenda for the G8 summit in Canada
The Right Hon Clare Short MP- Secretary of State for International Development
HE Professor George Kirya - Ugandan High Commissioner
The Rt Hon Clare ShortMP began by affirming her view that we are living at a time of very important opportunity in the history of Africa. By far the poorest continent, Africa is on present trends set to get poorer. Yet the situation is not hopeless. Economic performance is better than it was in the 1980s and 1990s when there was negative growth in a number of countries. Among the least developed countries, there are those which have been growing for a long time, like Uganda at the rate of 7-8 per cent per annum and Mozambique at the rate of 10 per cent per annum.
But if Africa is to reach the global goal as agreed by the Millennium Assembly of the UN, the World Bank, the IMF, the African Union, NEPAD, and others, the proportion of people living in extreme poverty must be at least halved by 2015. The rest of the world except Africa is on track to achieve that goal. For Africa to come on track, 7 per cent economic growth per year has to be achieved and sustained across the continent through to 2015. The aim of NEPAD and the G8 response should be about turning the present trends around.
Clare Short outlined why she believes that we are at a time of great opportunity to do better in Africa. The first is NEPAD. There have been very many plans for Africa - IMF plans, World Bank plans, UN plans - but NEPAD comes out of Africa. The determination to reform the continent is Africa taking responsibility for itself, its own leadership taking responsibility to lead its own reform agenda. They have to work harder to reduce conflict; 20 per cent of the continent are living under conflict with the attendant effects of enormous suffering, displacement, refugee populations, and damaging economic growth. The World Bank estimates that the level of conflict in the continent is costing every single country in the continent, given the reputation of links to instability and non-safety for inward investment.
But NEPAD calls for a partnership to work together to resolve conflict, crack down on corruption, create the proper macroeconomic conditions where the economy can grow, encourage trade, and encourage better domestic savings staying in Africa (40 per cent of Africas savings leave the continent).
- The G8 have promised and are working to respond to NEPAD in a proper spirit of partnership. For the G8 meeting taking place on 26-27 June (2002) in Kananaskis, Canada, each of the nominated personal representatives of the G8 countries have been working to prepare the ground for the G8 response to NEPAD. NEPAD leaders will also be in Kananaskis to take part in discussions and meetings.
This is an important opportunity. In the past, the relationship of the donors, the World Bank and the IMF to Africa tended to be one where the reform agenda was written in Washington, brought to Africa and taken on by governments who often did not like the agenda but, nevertheless, agreed to it because they needed the loan/money. Research has shown that such reform agendas tend to fail, whereas the prospects of success are much greater with an agenda that the people want and have put together for themselves.
- Another reason for Clare Shorts optimism for Africa is that three big and richly endowed countries which have been at war for more than two generations are, in her view, ready for peace. These are Angola, the Democratic Republic of Congo and Sudan, the biggest country in Africa geographically. Ms Short believes it is no accident that these countries with rich resources in Africa continue to be in conflict, because some people have ulterior motives for wanting to get at their resources.
However there is considerable work still to be done, and the G8 meeting is expected to focus on securing real peace in these three countries. Achieving that goal alone would greatly turn around Africas real prospects of a better economic growth.
On debt relief, Clare Short argued that the Heavily Indebted Poor Countries (HIPC) process has not been a failure. The current process involved not just writing off debt, but writing off the debt for countries which will put in place their own local leadership and their own poverty reduction strategies; which will have plans for the macro-economy and how it grows and for how locally raised revenues, debt relief and aid are to be used or drawn together; and which show commitment to public services and who they will reach. Countries in Africa (as well as Central America) that have gone through the HIPC process have been closely monitored and the government believed that it has helped to leverage much better economic management, public services, and a healthier partnership between developing countries and the World Bank and IMF.
But the HIPC process needs more resources put into it, as the original formula will not be fulfilled because of the drop in commodity prices. For example, the formula on earnings from exports to levels of foreign currency debts that was originally met from Uganda or Mozambique is no longer being met. Another billion dollars would have to be mobilised in order to top up many of the HIPCs so that they have sustainable exit from their debt problems and the capacity to move their economies forward. That will be an issue at the finance ministers' meeting before the G8 meeting.
Aid in the international system has been dropping, and aid to Africa, in particular, has dropped considerably. But the goal is not just to provide more aid but a better quality of aid. A big paradigm shift has been to see aid not as a desirable handout or a charitable contribution but as an investment fund to create the institutional capacity in countries to enable them to deliver improved services to their people and sustain those improvements. That means having the donors and the World Bank and the IMF collaborating behind the governments and their poverty reduction strategies, greatly reducing the administrative burden of the aid relationship, and focusing more on capacity building to create a modern state.
However, Clare Short stressed that aid needs to continue for a considerable time, over the next to two decades, in order to get to that point of take-off where a substantial resource transfer would not be needed. For example, in countries like Mozambique and Uganda who are on track with their reform programmes, 50 per cent of government expenditure is aid.
- The G8 needs to reaffirm its promise of a new trade round that would provide opportunities for the developing countries. Although the World Trade Organisation (WTO) is often criticised, it provides a democratic way of settling trade rules. Developing countries, who form the majority in the organisation, can get together and agree on what they want out of the trade round.
What is important and obvious for Africa in particular, is the processing of agricultural commodities, which is going to be one of the major areas of economic growth. Also, Africa needs to break down trade barriers within its continent. If this happens, economic growth would expand as well as the likelihood of achieving bigger investments because there would be bigger markets.
The cost of HIV/AIDS in terms of human life and suffering as well as to the economy has been high and across the continent, the threat is now being taken seriously. In Uganda, for example, a massive reduction in infection rates from 25-30 to 6-8 per cent has been achieved. That sort of achievement needs to be made right across Africa.
Research has shown that economic growth and lack of health care are interwoven. An initiative for improved vaccines and immunisation, and the global fund to make drugs available for the treatment of malaria, tuberculosis and HIV/AIDS are already in place. What is needed is a massive effort in building basic health care systems across the continent because even if all the drugs were free currently, many people in Africa would not get access to them. These are issues to be addressed by NEPAD and they are also issues for the G8 response.
Clare Short identified one single intervention that would have the biggest possible effect - that of having a generation of children who are educated, even if it is only at primary level. When girls go to school, they transform their countries - their earning power improves, they tend to marry slightly later and have fewer children, who are more likely to survive. Here again, Africa is not on track to achieve the global target of primary education for all children by 2015. But there are a number of individual African countries, like Rwanda, Malawi and Uganda, that are on track to achieve the target. This again shows that it can be done and it has to be done in more countries. The G8 is expected to back the World Bank initiative to fast track a number of countries that are making progress.
There are success stories from Africa and there is a great opportunity to help Africa succeed not only in its own interest, but also in the interest of Europe whose neighbour is Africa. However, this requires a determination to work effectively over the next 10 years or more to turn around the trend in Africa and for it to meet the 2015 targets. It requires more collaboration within the continent and across the world, and it is doable.
During the discussion, the following issues were raised:
- The British government was commended for driving forward the initiative on Africa.
- In relation to recent political happenings in Zimbabwe, Clare Short stated that Africa and NEPAD cannot be taken hostage because of one country.
- Asked to compare the assistance that the United States offered to Europe and to Japan as part of the Marshall Plan with the assistance that the G8 and the rest of the Western Community are prepared to offer to Africa through NEPAD (which is seen as Africas Marshall Plan), Clare Short replied that she would have to find out how much the Marshall Plan was in relation to GDP. However, she imagined that it would be considerably less than the aid that has flowed into Africa since independence. But that aid effectiveness has often been limited, partly because during the Cold War era, aid was misused for political purposes. Thus the post-Cold War era also provides real opportunities for backing effective reform.
- Speaking as chair, the Ugandan High Commissioner, HE Prof George Kirya, remarked that it was encouraging that many people of African origin had attended the meeting because NEPAD means partnership not only with Africans in Africa but also with Africans in the Diaspora.
- He added that while Africa appreciates aid to build its economy, trade and opening up of markets are crucial for sustainable development. Therefore, with developed countries continuing to subsidise (and in a recent case of a country, increase subsidies to) their farmers, it becomes almost impossible for African countries, most of whose economies are agriculture-based, to compete in raw and value added agricultural products.
- On democracy, Professor Kirya stated that three main points need to be followed: engagement (of whoever is necessary), dialogue (with anyone considered not to be doing what is right and needs to change), and quiet diplomacy. Africans, he said, generally do not like naming and shaming, and where persons are continually named and appear to be shamed (especially where they see themselves as country leaders), it becomes very difficult to dialogue. Therefore in talking about partnership, there is need to appreciate differences in culture.
This event is a discussion on what has been learned from previous sessions in the series "Can Africa Make it?"