I am in Cape Town to participate in the regional hearings of sub-Saharan Africa for the Global Commission on International Migration (GCIM) of which I am a member. This commission follows an unorthodox procedure of interactions in different continents. A regional perspective is valuable in differentiating action to meet regional imperatives. South Africa hardly mirrors the complex challenges of Africa?s economic and social development. Last week?s Budget presented to the South African Parliament suggests a sound economy with a high per capita income, a GDP growth of around 3%, modest inflation and a healthy external account. Its medium term challenges relate to further trade reforms, re-energising the privatisation programme, creating gainful employment while easing labour market rigidities, and defusing social tension. A strategy on the HIV-Aids problem is critical for demographic balance, for sustaining the labour force and improving investor perceptions.
The problems of sub-Saharan Africa are more serious. Despite 13 of its countries averaging over 5% growth during 1995-2002, this region remains the world?s foremost developmental challenge. Endemic weaknesses from continued ethnic and civil strife, weakness of institutions, vulnerability of exports and the deep shadow of HIV-Aids pandemic make coherent development difficult.
According to Africa Development Indicators, WB, 2004, economic growth for the region has slowed down and foreign direct investment (FDI) at $8.9 billion is a meagre 0.6% of global FDI. While net aid has risen over recent years, on a per capita basis, it was $27 in 2003, far below the 1992 mark of $40. Sub-Saharan Africa is the only region in the world where the number of people living in extreme poverty has doubled to 340 million between 1981 and 2003; 32 of its 47 countries are among the world?s 48 poorest nations. With about 11% of the world?s population, Africa accounts for just 1% of global GDP. In fact, the GDP per African has fallen by 13% since 1991, and its share in global exports has declined from 3.5% in 1970 to 1.4% in 2002.
The world is beginning to wake up to the challenges of failed development paradigms. At the recent World Economic Forum conference in Davos, a key panel discussion focused on Africa?s developmental challenges. UK?s initiative based on the recommendations of the Africa Commission proposed far-reaching initiatives on debt-forgiveness, dramatic enhancement in overseas development assistance (ODA) coupled with improved governance. Jeffrey D. Sachs? recent report, ?Investing in development: a practical plan to achieve the Millennium Development Goals?, makes a compelling case for enhanced aid commitment as well as some early harvest through smaller investment. For instance, the death of 200,000 children each month from Malaria can be fully reversed by just $2-3 billion a year, costing $2 per person in the developed world.
In the long run, developed countries must adhere to promised aid levels of 0.7% of their GDP instead of current 0.25%; the main defaulters USA and Japan need to accelerate action. The Millennium Development Goals (MDG) for Africa can be achieved by a combination of short-term action even with limited resources, which have multiplier effects. Long-term aid commitments are necessary for a coherent development strategy. The World Bank?s new strategy covers governance, human resource development, competitiveness and effective external assistance. The short-term early harvest measures mentioned above are clearly critical for Africa?s demographic balance and having enough able bodied men to execute the major developmental challenges that lie ahead.
? Long-term aid commitments are needed for a coherent development strategy ? African leaders are now committed to governance at the highest level ? India can draw a broad lesson from Africa?s travails and its new strategy |
In the wider context, the effectiveness of aid is inextricably linked with ending conflicts, improving institutions and the quality of governance. The New Partnership for Africa Development (NPAD) adopted in July 2001 by African leaders is a commitment to good governance. Apart from tangible economic resources, it includes many initiatives, particularly an African Peer Review Mechanism to promote good governance and greater accountability with enhanced focus on conflict resolution and prevention and programmes in human development. The efficacy of this mechanism could persuade the world to commit more resources as well ensuring sustainable outcomes for realising a strategy entitled ?Can Africa claim the 21st Century??
Does Africa?s development record have any lessons for India? I mention two. First, coherent economic development needs inclusive growth and policies, which mitigate against ethnic and civil strife. Second, while adequacy of resources is critical for infrastructure and social development, it is no substitute for ?good governance.? Large parts of India, which have fallen below the average national indicators, suffered from poor governance. In our democratic framework with a federal polity, improved governance is not an automatic outcome of periodic elections. This is so in Africa as well.
India has no counter-part of a peer group mechanism nor can such an institution be mechanically replicated in our context. However, the National Development Council (NDC) is an important link mechanism, which in the past has been mainly used to adopt or review Five Year Plans. Its role can be enhanced by using it as a monitoring mechanism on governance issues, enabling states that have lagged behind. There is scope for reinventing the role of the National Development Council, as we increasingly focus on expenditure outcomes. This is one broad lesson we can draw from Africa?s travails.
There are strong economic and moral compulsions for global peace and stability. We must support Africa in its hour of need. Indeed, Africa is racing against time.
