Developing countries must use their resources to stimulate growth
worm’s eye view
Steven Friedman
We must take care lest growth plans become Africa’s chief growth industry.
President Thabo Mbeki is investing much in the Millennium Africa Recovery Plan (MAP) he authored with Nigerian President Olusegun Obesanjo and Algeria’s President Abdelaziz Bouteflika and which has been merged with the Senegalese Omega plan for African economic growth. He has made much of the acceptance of the new plan, called the New African Initiative, by the G8 countries.
Why not share his enthusiasm? Africa needs economic recovery; we need Africa, and not only because some fund managers can’t tell the difference between Johannesburg and Nairobi. Endorsement by the world’s richest countries can surely only help?
There are two reasons for staying sceptical for now.
The first is that the plans still seem to see the key to African growth in what the rich countries do. This seems to continue a pattern in which African governments repeatedly point out to foreigners that they have implemented all the policies would-be investors are said to want, but still don’t get the investment they need.
It should be obvious by now that something is wrong with this approach. Investors abroad are far more likely to sink money into a country if it is actually growing than if it commits to policy recipes. So, unless “developing” countries can find ways to begin growth using their own resources, they will not attract foreign money.
This is not an argument for seeking to stop the world so Africa can get off. Rather, it argues for tailoring policies and strategies to domestic needs, not the imagined requirements of foreigners.
But do African countries have resources that can kick-start growth? The same sceptical question was asked about Mauritius in the 1960s, before it began a sustained growth take-off. All societies, no matter how poor, have resources. The trick is to harness them.
In parts of Africa the problem is not that no one is engaging in economic activity. It is that the action happens outside the reach of government and law and so its fruits do not contribute to development. Bringing it into the legal sphere would probably do more to trigger growth than endless fretting about what foreigners want.
So, if the new plans are merely a way of trying to persuade foreigners to help solve problems whose solutions lie in Africa, they are bound to fail. Far more debate and thinking seems to be needed on what it would take for African economies to begin realising their potential to trigger growth before we really have a strategy to take us further.
Whichever turn that debate takes, it is likely to conclude that the solutions are more political than economic.
As Mbeki himself has implied, conflict is a severe block to African economic progress: productive investment is highly unlikely unless the wars end. The solution to conflicts, as our foreign policy-makers have stressed for a while, is political.
More specifically, the answer lies in the spread and strengthening of African democracy.
As always, there are those, in Europe and the United States as well as Africa, who insist that African countries need “good governance” rather than democracy. This seems to ignore the fact that Africa has had four decades of trying to get along without democracy: its lack is the cause of the problem, not its antidote. It is no accident that only two African countries have turned in sustained growth records and that they are also the continent’s only two long-standing democracies, Botswana and Mauritius.
Why is democracy so central to growth in Africa? Because African societies are diverse and conflict on the continent stems chiefly from refusal to accept diversity. And because many Africans rely on “informal” activity to make a living since they do not believe government cares about them or responds to their needs.
If the blocks to economic growth lie in a failure to respect difference and to respond to people at the grassroots, the answer must lie in strengthening a system that, if it is allowed to work as it should, provides channels for differences to be accommodated and grassroots people to be heard: democracy. If, then, our government is in earnest about African economic recovery, it needs also to be serious about democracy.
In theory, it is. In practice, democratic commitment runs into snags. Firstly, pursuing democracy offends some African leaders. Secondly, Mbeki is painfully aware, after his attempts to press democracy’s claims during the Mandela administration, that, despite the size of our economy, there is not much we can do to change undemocratic regimes or ensure that conflicts are settled by the inclusive political agreements that our foreign policy rightly insists are essential.
The result is to erode the credibility of plans for African renewal. One of MAP’s authors, Bouteflika, heads a government that suspended an election because it did not like who was winning. Similarly, it has become trite to point out that enthusiasm for democracy sounds hollow if it is not accompanied by a willingness to denounce state-encouraged violence against the opposition in Zimbabwe. Promises of renewal also lack credibility in the absence of successful action to end conflicts.
What then can be done? Perhaps the answer lies in scaling down our ambitions.
We are right to insist that only inclusive settlements can end wars, but then we need to acknowledge that we have a limited ability to achieve them and that they are built only over time. If we said that, we might be judged by whether we contributed to the slow process of building a settlement rather than whether we can slap together a quick fix. Our role in refusing to be part of a military “solution” in Angola or Congo might then be seen as important even if we are not yet able to help settle these conflicts.
Similarly, our failure to denounce the Mugabe government is paltry based on the argument that this would not solve the problem. But failing to criticise hasn’t done any good either. Simply telling the rest of the continent where we stand will solve nothing instantly. Over time, it might be more effective than pretending that we can achieve democracy by having a quiet word with its enemies.
So, just as the government may create problems for itself at home by promising more than it can deliver, perhaps it is making the same mistake abroad.
Rather than an attempt to achieve peace, democracy and growth soon, we need an alliance of African democracies who know that their influence will be limited and that the task will take time but who, by setting an example and spelling out a different vision for the continent, are likely eventually to win the argument.
Progress might be slower and steadier but more lasting and credible than the search for dramatic but unattainable solutions.