Chapter

14 Tour de Table

Author(s):
Laura Wallace
Published Date:
May 1997
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In the final tour de table, several key themes emerged.

Culture

On the question of culture, Jacob Mwanza of Zambia observed that the seminar had opened a window of opportunity for his country and the African continent to explore economic models of development that stood as alternatives to the traditional Western ones. Development across cultures was possible, with the success stories sharing one key element: the consistent pursuit and implementation of sound macroeconomic policies.

The openness to drawing on the best from each culture was shared by Jean-Claude Brou of Côte d’Ivoire, who emphasized that every culture had something to offer in terms of facilitating economic development. In the design of long-term programs in African economies, one needed to draw on the best elements of African cultures.

Toshio Fujinuma of Japan cautioned, however, that taking culture into account did not mean just picking the best model for rapid economic growth but, rather, instigating changes in social values or behavior patterns—in other words, totally changing the whole social system, not just the economic system. It was very tempting and easy for donors to try to insist on certain social or behavioral changes, but more likely the answer laid in recipient countries generating these changes on their own.

Hitoshi Shimura of Japan also underscored that before Japan could agree to particular aid packages, it would first have to bring its taxpayers on board. To do that, he conceded, Japan would need to better understand African countries, not just in economic terms but also in political and cultural terms.

East Asian Miracle

Drawing lessons from the East Asian miracle, Basant Kapur of Singapore emphasized the importance of an outward-oriented trade and investment strategy to boost economic efficiency and competitiveness. Such a strategy involved many elements, such as getting prices right, pursuing wide-ranging economic and social infrastructure improvements, attracting direct foreign investment (which brought not only capital but also technology and access to foreign markets), and insisting on good governance.

Tetsuji Tanaka of Japan noted, however, that the exact recipe would vary from country to country, reflecting diverse starting points and differences among countries, such as in culture. As a result, each country would have to bear a different cost and adopt its own speed in the move to a market economy. Even so, he was confident that Africa as a whole would emerge as a major economic power in the 21st century.

Governance

The need for good governance was stressed by Joseph Kinyua of Kenya, who considered it a critical element of deepening structural reform in Africa—which in turn was essential for reducing poverty on a long-lasting basis. Picking up on Hiroyuki Hino’s distinction between economic and noneconomic governance in the prior panel discussion, he remarked that a lack of good economic governance gave rise to wasted resources and investment distortions, making it harder for policymakers to raise living standards. But it was difficult to achieve good economic governance without also securing good noneconomic governance, which formed the basis for political stability.

Brou suggested that many African countries were making progress on the economic governance front—making budgetary procedures more transparent, improving economic security, and fighting corruption. Indeed, these were essential components of most African countries’ economic programs aimed at boosting economic efficiency. Progress made on the noneconomic governance front, such as the democratic process, should help improve the implementation of economic reform programs.

Peter Warutere of Kenya called upon African governments to act on some basic issues being cited in negotiations with donors, such as utilization of revenue, enforcement of the civil service code, and prosecution of public servants who were involved in corruption. However, that should be done because governments felt accountable to use the judicial systems to prosecute such issues, and not just because donors insisted on those actions before providing aid.

Luc Oyoubi of Gabon wondered whether everyone in the seminar meant the same thing when they talked about democracy, as some seemed to feel that there were only good elements. Certainly, freedom of enterprise was favorable, but output lost to strikes was not.

Conditionality

From the donor point of view, Michael Foster of the United Kingdon commented that a major problem he observed with conditionality was that it prevented credibility. It was private investors, not donors, who needed to be convinced and, with that in mind, calling economic programs “IMF and World Bank programs” was quite unhelpful. Recipient governments should take ownership of their programs and convince private investors that they would remain committed.

The importance of ownership and commitment was also mentioned by Gebreselassie Yosief of Eritrea, who said that the recent experiences of his newborn nation illustrated that those elements mattered far more than conditionality. Although Eritrea had yet to draw on much external support, it had moved quickly with homegrown policies to liberalize trade and investment, create a lean, efficient government, and privatize state enterprises—a sharp contrast to other countries with Policy Framework Papers on the books but never actually implemented.

David Cole of the United States counseled that the relationship between the providers of external financing and technical assistance and the recipients had the best chance of succeeding when it was seen as an alliance rather than an adversarial relationship. So long as it was structured on adversarial grounds, there were going to be problems. As evidence he cited the cases of Korea in the mid-1960s and Indonesia in the late 1960s, both of which enjoyed turning points when there was a close alliance between donors and recipients.

Timing

What would the timing be for Africa? Brou—reacting to Yasuo Yokoyama’s statement that countries should spend decades establishing sound economic fundamentals before embarking on privatizations, as Japan had done—stressed that Africa could not afford the luxury to wait that long to replicate the East Asian miracle. It could not allow itself that luxury. Already, there were positive stirrings in several countries in East, West, and South Africa. Africa was a mutating continent, a continent in transition, now going through the difficulties that East Asia and others had experienced on their own road to development.

Cole cautioned, however, that in the 1950s and 1960s, the symbol of development and modernization had been the steel mill, leading many countries to feel that if they built a steel mill they would be industrialized and well on the road to development. He worried that in the 1990s, Africans had come to view the establishment of securities markets as a symbol of modernization of the financial system—a leap that could be taken—when in reality, there were many intermediate steps, and countries had to weigh comparative advantage, capacity, and real economic needs before deciding on a financial sector strategy.

This note of caution was echoed by Tadahiko Nakagawa of Japan, who mentioned that even if an issue is burning, we must think first. Nonetheless, he underscored the international community’s responsibility to help Africa in its time of need, looking for optimism in the fact that many Africans at the seminar had cited growing signs of private sector development.

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