CUTS ARC SOUNDS Vol. 1 No. 2

Concerns of Civil Society Organisations (CSO) on the New Partnership for Africa’s Development (NEPAD) have taken a new turn at the recent World Economic Forum’s Southern African regional meeting in Durban, South Africa in June 2002. The meeting witnessed street protests by hundreds of civil society activists gathered from the countries of the region. The CSO was protesting against what they called “arbitrariness on the part of governments in pushing the programme” without consulting stake holders.

NEPAD is a pledge by African leaders based on a common vision and shared conviction that they have the pressing duty to eradicate poverty and to place their countries, both individually and collectively on a path of sustained growth and development and at the same time to participate actively in the world economy.

Views expressed by CSO have had mixed feelings and range. Some regarded the initiative as a devil in detail, although it looks good on the surface. Some others regard NEPAD as a disaster for the African continent and liken it to a continent wide Structural Adjustment programme (SAP) which seeks to reduce state to a managerial role and thereby stripping it of its responsibility to address inequalities and ensure health and education for all as well as protecting the environment and to play other critical social roles. Further, NEPAD does not put the needs of people first as there is no mention in the document about food security, education, gender analysis, health and self sufficiency apart from the “benefits of free market will eventually help the masses”. This view is held in connection with the obvious fact that the negative effects of SAP have been with Africa for the past 40 years.

The major criticism is perhaps the notion that the authors of NEPAD i.e. Messrs. Thabo Mbeki of South Africa, Abdelaziz Bouteflika of Algeria, Olusegun Obasanjo of Nigeria and Abdoulaye Wade of Senegal did not consult their people and thereby flouting one of the most essential fundamentals of democratic principles. The emphasis in NEPAD on foreign investment and exports is also seen as virtually guaranteeing Africa’s agricultural lands to continue falling in corporate hands and thereby sacrificing Africans’ health for international corporate profit. It is argued that NEPAD will only lead to re-colonisation of Africa in a subtle form where developed nations will use banks and capital to achieve the goal. An example of this is the linkage of NEPAD to governance situation in Zimbabwe where developed nations are saying that the situation is a test to NEPAD which among many things is supposed to address issues of political governance and democracy.

Civil Society has been part and parcel of development activities in Africa; let it be health, education, poverty eradication and other development sectors. Given this context, it would be inappropriate on the part of the policy makers to keep away civil society in the formulation of development programmes such as NEPAD.

This issue of SOUNDS covers some of the views heard on NEPAD and other news on trade and development in Africa.

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NEPAD and African Union

The operational foundations of NEPAD and the formation of African Union were two interlinked developments which were witnessed by Africa recently. The operational details of NEPAD came into discussion during the Durban meeting of World Economic Forum (WEF) during 5-7 June 2002. The concept of NEPAD was agreed at a summit of 20 African leaders in Nigeria in 2001. The programme highlights good governance in return for public and private investment flows and development aid to Africa. The NEPAD proposes the establishment of an effective African Peer Review Mechanism (APRM) which would be designed, owned and managed by African people. APRM aims to enhance African ownership of Development Agenda, identify, evaluate and disseminate best practices.

The formation of African Union (AU) in a Summit of African leaders in July 2002 , which replaced the 40 year old organisation of African Unity is another milestone in Africa’s development. The core structure of the AU, which will start functioning immediately, is composed of an Assembly of Heads of States and Governments, the Executive Council, the African Parliament, the Permanent Representative Committee of Ambassadors and the African Commission. (Source: Zambia Daily Mail, 27 June 2002)

NEPAD is No Panacea: Critics

NEPAD is being used by African leaders to try and gain a few extra crumbs in the form of aid and debt relief from the leaders of the industrialised world. The hopelessness of the programme is evident, if we look back at the history of Africa’s economy since independence. Africa is not backward but it has, and continuous to be positively underdeveloped by the world economy. The founding document agreed in Abuja in October 2001 recognises the relative poverty of Africa and that this has resulted from “centuries of unequal relations”. But the African leaders claim to believe that Africa still suffers from limited integration into the global economy and that integration presents the best prospects for future economic prosperity and poverty reduction. This is despite the growth of South African and Zimbabwean economies, for example when they were isolated from the world economy.

The NEPAD Document refers to the UN Millennium declaration adopted in September 2000, which confirms the global community’s readiness to support Africa’s effort to address the continents underdevelopment and marginalisation. UN bodies are forever making commitments and promises, but they are too often broken. Since 1969, the UN has had a target for the rich countries to pay 0.7 percent of their GDP in aid, but only a few Nordic countries and the Netherlands achieved this. On an average the OECD countries give only 0.22 per cent of their GDP as aid, a fall of a third in the last ten years. In Africa, the aid has fallen from $32 per person in 1992 to only $19 in 1998. The US managed to pay only 0.11 per cent of its GDP as overseas aid in 2001. An in-depth study into the world’s least developed countries rejects claims that globalisation is good for the poor, arguing that international trade and economic system is part of the problem, not the solution. So why do the current leaders of Africa believe that the economic policies outlined in the NEPAD document will help the poor of the continent?. (Source: Abridged from Drew Povey, The post, Lusaka, July 6, 2002)

Africa Suffers from Excess Globalisation

The detractors of NEPAD argue that it evolved under conditions of smoke filled room secrecy in close contact with the G-8, Bretton Woods and international Capital. As a result, the plan denies the rich contribution of African Social struggles in its very genesis. Instead, it empowers trans-national corporations (TNCs) , Northern donor agency technocrats, Washington financial agencies, etc. NEPAD initiative had come under scrutiny in African Social Forum Meeting held at Bamako, Mali early 2002. Africa’s continued poverty and marginalisation is a direct outcome of excess globalisation, because of the drain from ever declining prices of raw materials, crippling debt repayments and profit repatriation to TNCs. ( Source: Abridged from Patrick Bond, The Post, 22 June 2002)

Sustained Economic Growth Vital for Poor – IMF

The International Monetary Fund (IMF) says poverty reduction in low income countries will not be achieved without sustained economic growth that favours the poor. The IMF says in its 2001 annual report that poverty reduction will require concerted efforts of both the low income countries and the broader international community. Among the responsibility of the world community are opening of the markets for developing countries so that they can increase the resources applied to poverty reduction. The report says that the IMF has an important role to play in collaboration with the World Bank in the global effort to promote poverty reduction. In October 1999, the IMF financial committee endorsed enhancement to the initiative for Heavily Indebted Poor Countries (HIPC). The report adds that the committee also accepted proposals to link debt relief as well as concessional lending through the IMF’s new Poverty Reduction and Growth Facility (PRGFs) and the World Bank’s International Development Assistance (IDA) to country-owned comprehensive policy strategies described in the Poverty Reduction Strategy Paper.(Source: Zambia Daily Mail, 22 Jan. 2002).

Africa Prepares for a New Round under WTO

As a follow up of the 4^th Ministerial Conference of the World Trade Organisation (WTO) held in Doha in 2001, ARC organised a regional seminar at Lusaka on 25-26 March 2002. The regional seminar titled “WTO Doha Ministerial and the New Trade Round: An African Perspective” made an attempt to assess the Doha work programme and also devised strategies for future research and advocacy, especially for the non state actors of the southern and eastern African countries. It brought together 35 trade policy experts from government, inter-governmental agencies, civil society and business representatives from seven countries in the region.

The deliberations in the seminar focused on three key aspects-sharing the experiences of Doha Conference, identifying national and regional priorities and devising strategies for the future. A notable part of the deliberation was sharing the experiences of the delegates from the region who participated in the Doha Conference. Experts from Kenya, Mozambique, South Africa, Uganda, Zambia and Zimbabwe outlined their national priorities for the forthcoming trade round. The purpose of this exercise was to identify the common areas where countries in the region could work together for evolving a regional agenda. The seminar concluded with the adoption of separate sets of recommendations for research and advocacy work in certain critical areas identified by the delegates. (Source: CUTS internal file)

Consultative Meeting on FDI Policies in Zambia

A National Reference Group (NRG) meeting of the Investment for Development Project (IFD) undertaken by CUTS-ARC in Zambia was held on 25^th April 2002 at Lusaka. Papers on investment scenario in the country were presented by Dr. Oliver Saasa, University of Zambia and Mr. C.M. Mudenda, the IFD country researcher. The Meeting was attended by 45 stake holders hailing from various government departments, regulatory bodies, trade and industry, research and civil society organisations, media, etc.

Dr. Saasa presented a paper on “Economic Liberalisation and the Role of Foreign Direct Investment: Lessons for Zambia”. The paper provided an overview of the economic liberalisation initiated in Zambia since early 1990s. Under the IFD project research, a draft document entitled Zambia Investment Policy Report was discussed at the meeting. The document analyses investment regime in Zambia under four general headings Macro-economic context, Policy trends, Investment Policy audit and Policy making process. (For more information , please visit: www.cuts-international.org)

Workshop on Multilateral and Regional Trade Negotiations

The Southern African Enterprise Network (SAEN) through its Zambia Chapter, the Zambia Enterprise Network Association ZENA, with the help of European Union (EU) and the World Bank Mission in Zambia organised a workshop on "Multilateral and Regional Trade Negotiations (MRTN), Private Sector Organisations as Partners of Choice for Governments" at Lusaka on 3-4 April 2002. The workshop has its background from private sector (PS) realization of the need to become a quality partner of government and regional bodies like COMESA and Southern African Development Community (SADC) in multilateral, regional and bilateral trade negotiations. The SAEN is Part of a Pan‑African association, known as the Enterprise Network that brings together new generation African entrepreneurs who seek to improve the business climate in their home countries and to foster regional trade and investment in their geographic sub‑regions. (Source: CUTS Internal file)

SADC Regional Conference on Doha

A regional conference under the theme “New WTO Round-A post Mortem of the WTO Doha Ministerial Conference and Challenges for Southern Africa” was held on 9-10 May, 2002, at Vumba, Zimbabwe. The Conference was co-hosted by the Trades Centre, Friedrich Ebert Stiftung (FES), Harare and the Institute for Global Dialogue, Johannesburg. The main purpose of the conference was to take stock of the Doha outcome. Deliberations at the conference were mainly focused on the themes viz. agriculture, services, market access of non agricultural products, trade-debt and finance, small economies, new issues- trade and investment, competition policy and investment. The speakers highlighted the need for an audit of the Doha Ministerial Conference so that the stake holders will be better prepared for the New Round. As a follow up of the conference, it was agreed that Trades Centre would take initiative in identifying on “who is doing what” on trade matters at SADC. This data base will be used for better co-ordination between civil society and policy makers in trade policy making and also providing negotiating inputs. (Source: CUTS internal file)

ARC Policy Brief

a) Enhancing LDC Exports to OECD Markets: Challenges and Opportunities

Efforts towards enhancing export opportunities of developed countries (LDC) acquired a fresh impetus during the Third United Nations Conference on least Developed countries (UNLDC-III), held in Brussels in May 2001. Prior to this, there were two initiatives by the rich countries, who intended to offer better market opportunities for the LDC exports. The US introduced the African Growth and opportunity Act (AGOA), while the European Union (EU) came out with the "Everything But Arms" (EBA) initiative. This policy Brief provides an objective assessment of the marginalisation of the LDCs in the global trading system.
Download PDF www.cuts-international.org/arc 2001-2.pdf

b) US Politics and Free Trade: Trade Policy Options for Africa

On the heels of the Quebec Summit of the America and meeting of the organisation of American States (OAS) to re-energise efforts to create the world’s largest Free Trade Area of the America (FTAA). America’s trade focus has turned to Africa and May 23, 2001 marked the first Anniversary of the enactment of the Africa Growth and Opportunity Act (AGOA). The AGOA itself is little more than a framework for shaping future US-Africa economic relations. This policy offers insights into some of the dynamics African policy makers must contend with. Download PDF www.cuts-international.org/arc 2001-1.pdf

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