/ 2 July 2003

Setting Nepad’s compass

I cannot believe it. That was the reaction of many people when I told them of the appointment of Chris Stals as one of the six eminent persons who will oversee the crucial African Peer Review Mechanism (APRM). It was also mine, until I paused for thought. His appointment is illuminating; it tells us all we need to know about both the politics and the economics of the Thabo Mbeki-led New Partnership for Africa’s Development (Nepad). 

Stals, you may recall, was the South African Reserve Bank governor during apartheid’s dying years (appointed in 1989) and retained by the Mandela government as part of its strategy for a “smooth economic transition”.

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Nepad has reached a crucial phase. The three Nepad musketeers, Mbeki, with Nigerian and Algerian Presidents Olusegun Obasanjo and Abdelaziz Bouteflika, have successfully steered the project through some choppy, mine-infested waters.

First they wrestled the concept of African development from the dying embers of the Organisation of African Unity (OAU). Armed with a much narrower brief from the September 1999 OAU heads of state meeting, the troika travelled to the 2000 G8 meeting in Okinawa, Japan, determined to take matters into their own hands. They succeeded: from that time onwards the project’s sustenance derived directly from its relationship with the G8.

Second, even though it runs much like a major bilaterally negotiated development project might, they have kept it on track inside what is now the African Union to the extent that Nepad is now regarded as the central project of the AU. Indeed I suspect that to many of the key people involved in its development, the AU is considered as subordinate to Nepad.

They have also managed to protect Nepad from the distractions of Iraq and Zimbabwe. At Evian, once again, they persuaded the G8 to continue to back the project. And whether you like Nepad or not you have to recognise the political achievement: Mbeki has kept the idea alive.

But quite what the G8 is backing, and what that backing actually amounts to, is unclear. What exactly is Nepad? The answer is that at this point in its history, it is what you want it to be. To some it is a chance to reinforce and extend the hegemony of capital across the continent and to open up new markets.

And not just for products from the developed world. If you take a stroll down the main drag of most African capital cities these days you could be forgiven for thinking that you are in Bisho. Whether in Lusaka or Kampala, the same shops and advertising boards greet you: MTN, Shoprite or Checkers, SA Breweries. Old Mutual, Anglo American, Sasol and Kumba are making their way north too.

This, argues Rhodes University scholar Jimi Adesina, is one of three impulses that drives Nepad, at least from a South African perspective. For big businesses in South Africa, Nepad is an opportunity to drape themselves in the South African flag and to take over markets across the continent.

The other strands to Adesina’s analysis are equally intriguing. The second is that access to the continent is important for the South African fiscus, in terms of attracting foreign direct investment. In order to counterbalance Zimbabwe and the other continental disappointments that suck confidence from the international investor community, Nepad and the APRM embody the serious intent and commitment to “reforming Africa”.

This pragmatic impulse is at least matched by the last, which is that there is a genuine concern within the African National Congress that Africa should have the power and capacity to tackle its own problems. How else, asks Adesina, can one explain the commitment to the Great Lakes’s peace process, and the R54-million spent on the negotiators at Sun City?

This is the irony of Stals’s appointment. In order to serve the needs of the first two impulses, South Africa’s nominee to the eminent persons group is a 68-year-old white “bankers’ banker”, first appointed to a senior position in the Reserve Bank in the 1970s, and as Stellenbosch University professor Sampie Terreblanche says, a “true Pretoria man and a Broederbonder to the very end”.

To Standard Bank group economist Iraj Abedian, however, it is a “smart” appointment. Despite the conservatism of his reign as governor, Stals provides vast experience on the macroeconomic side and huge credibility internationally. Abedian also welcomes the fact that it shows an “intention to use Africa’s capacity regardless of race and ethnicity”.

To a member of FW de Klerk’s last cabinet who knew him well in those days, it is precisely because Stals is a conservative that he is on the panel — as a symbol of seriousness and to help satisfy the doubting members of the G8. But my conversation with this former cabinet minister raised an important question. Is Stals up with the times, given shifts in emphasis within, say, the World Bank?

In his farewell speech when he retired from the Reserve Bank in 1999 Stals laid out his “12 commandments of central banking”. Number one: “A true banker will always be against inflation.”

As an epitaph not just for Stals and his reign but for what some people like to describe as “neo-liberalism” or “Washington-consensus macroeconomics” nothing could be neater.

Remove macroeconomics from democratic control by removing monetary policy decisions that affect inflation, such as interest rates, from the control of politicians. United Kingdom Chancellor of the Exchequer Gordon Brown did on his second day on the job in 1997 so as to protect his conservative economics from attack from the left of his own party.

As United Nations Development Programme economist Azghar Adelzadeh puts it, Stals’s appointment shows the emphasis that will be put on low inflation and the policies that create it and a “lack of sensibility to jobs and other socio-economic considerations”.

Thus, Stals’s appointment shows us the direction of the APRM. Despite Graça Machel’s more predictable appointment as an eminent person — hers, as a symbol of humanitarianism, and as a sop to the human rights lobby — the peer review is likely to be about certifying the economic fitness of the “premier division” of African states.

Peer review, remember, is a voluntary procedure. So far 15 countries have consented to this, and Ghana is the favourite for the first review. Those that accede and are reviewed will be rewarded by the G8. That is the theory and so far as the Canadians and the French, for example, see it, the simple deal that underpins Nepad.

In the long run, warns Adelzadeh, this approach could become as prescriptive as the International Monetary Fund’s. Far from releasing Africa to chart its own course, it could simply replicate global institutional failings with its own home-grown hetero- doxies. As Adesina reminds us, Nepad’s Declaration on Democracy, Political, Economic and Corporate Governance says precious little about development and poverty, and even less about socio-economic rights.

Given that he must now oversee compliance, it is hard to know whether to laugh or cry at the fact that the declaration is full of the language that Stals will understand and has very little of that which he would not. A year ago Nelson Mandela chair- person of politics at Rhodes, Peter Vale, posed the question about Nepad: Is it a glass half full or half empty? Until now I considered it half empty. With Stals’s appointment it is clear that it is filling up. And fast.

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