Amid Record Growth Rates, Emerging Stability, President of Ghana Cites

Integration into World Markets as Challenge for Africa

 

Panel Discusses Action in Directing Trade towards Continent’s Prosperity

(Received from a UN Information Officer.)

ACCRA, GHANA, 21 April -- With many African countries experiencing record growth rates ushered in by a new era of stability and macroeconomic reform, Ghanaian President John Agyekum Kufuor told the United Nations Conference on Trade and Development (UNCTAD) today that the challenge now was finding ways to help better integrate the continent into international financial and trade markets, while boosting trade between Africa and other developing countries, in order to make its dynamic growth sustainable.

Addressing the high-level segment of the twelfth Ministerial Meeting of the United Nations Conference on Trade and Development (UNCTAD XII), on the theme “Trade and development for Africa’s prosperity: action and direction”, President Kufuor said there were lessons to be learned from the economic growth of Brazil, China and India, where forums for cooperation between those and other developing countries -- or so-called South-South cooperation -- were already coming to fruition.  Further, it was necessary to reinforce partnerships between African countries and the United Nations in order to achieve the Millennium Development Goals by 2015.

He also emphasized that a partnership of shared goals between African countries and their bilateral partners must be mutually beneficial, while at the same time expressly helping Africa put in place the necessary infrastructure, investment funding and other capacities to help the continent integrate better into the world production and trade systems.

President Kufuor, whose country is hosting UNCTAD XII in its capital, Accra, was among a diverse panel of African, European and Latin American leaders participating in today’s discussion, which was chaired by United Nations Secretary-General Ban Ki-moon.

With most of the speakers welcoming the world body’s decision to focus on ways to extend and sustain Africa’s recent economic advances, the African leaders called on the United Nations and the wider international community to remain vigilant, however, because the current food-price crisis and global credit crunch could spell an economic slowdown in the West, threatening to undermine the surge in economic growth throughout much of Africa.  That would be particularly damaging for the continent’s sub-Saharan region, which still lagged behind in poverty reduction and education development indicators.

While urging rich countries to live up to their commitments to support African development, the leaders also called for “bold and innovative steps” as a way to ensure that increased revenues were used to address critical issues such as building infrastructure, increasing access to finance for home-grown entrepreneurs and improving health and education.

Ernest Bai Koroma, President of Sierra Leone, stressed that Africa had a lot of catching up to do to “turn a corner”, so that it could participate equitably in global trade markets.  While it certainly needed donors to live up to their commitments, the region also required bold strategies to redirect investment into areas that boosted key sectors such as infrastructure, technology and agriculture, “so that we will be able to feed ourselves”.  While the region’s steps to ensure self-sufficiency must be bold, they must also be brave.

While change was never easy, it was clear that the status quo must be modified within Africa and the global environment, he said.  The starting point for Africa was promoting zero-tolerance polices towards corruption.  In countries that tackled corruption head on, confidence rose and investment jumped, both locally and internationally.  Further, Africa must make priorities of the education and training of its citizens, especially in conflict-affected and post-conflict countries, in order to ensure the development of a well-equipped and adaptable workforce.  “The time has come for us to take steps that would put our countries and continent on the path to self reliance,” he said, adding, however, that every “bold step” required the unflinching support of partners such as UNCTAD.

Ana Vilma Albanez de Escobar, Vice-President of El Salvador, said her country had struggled for many years to achieve political and economic stability, particularly following its long civil conflict of the 1980s.  It had relied too heavily on commodities such as coffee and cotton, bearing the burden of a 60 per cent poverty rate.  In order to progress, El Salvador had strengthened institutions and followed through on a reform programme, privatizing many sectors and opening itself up to private investment flows.  As a result, it was now known as one of the most transparent economic environments in Central America and growing quickly.

Progress did not happen overnight, however, and a focus must be kept on linking economic growth to improving people’s lives and reducing poverty, she said.  For that reason, El Salvador looked for the right investors and kept the focus on social and economic development.  Regional arrangements were also very important and the development of regional infrastructure could be useful.  Education was important, and El Salvador had directed whatever resources were available to that sector.

In his opening remarks, United Nations Secretary-General Ban Ki-moon highlighted some of Africa’s development success stories, noting that Ghana had made significant strides in increasing primary school enrolment, as had Kenya, the United Republic of Tanzania and Uganda.  Senegal was making great strides towards meeting the Millennium Development Goals relating to water, while Niger, Togo and Zambia had made impressive progress in malaria control through the free distribution of bednets.  “These success stories need to be replicated and scaled up across Africa with effective support from the international community,” he said.

He stressed that the benefits of globalization, especially increased trade and investment, were among the surest drivers of long-term growth and human development.  Regrettably, however, Africa had yet to benefit fully from those worldwide trends; its share of global trade and foreign investment languished at a mere 3 per cent.  A sure way to boost that figure was by ensuring a rapid breakthrough in the Doha Round of trade negotiations that incorporated a significant development component.  South-South exchanges, greater foreign direct investment and crucial infrastructure advances facilitated through “aid for trade” could also help spur Africa’s progress.

Wrapping up the discussion, which was moderated by UNCTAD Secretary-General Supachai Panitchpadki, he stressed the need to confront development emergencies and to create an equitable international trading system.  Those who believed in free trade must not tolerate a global trading system rife with unjustified tariffs and subsidies, and those who believed in the Millennium Development Goals must not tolerate mothers dying in childbirth.  However, the window for decisive action was closing fast, he warned.  “So let us seize this moment and let us deliver for the people of Africa.”

Also speaking today were the Presidents of Brazil and Finland, as well as the former President the United Republic of Tanzania, the former Prime Minister and Personal Representative of the President of Algeria, and India’s Minister of Commerce and Industry.

The United Nations Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States addressed the high-level meeting, as did the Director-General of the World Trade Organization.

Background

The United Nations Conference on Trade and Development (UNCTAD) continued its twelfth quadrennial Ministerial Meeting this morning with a high-level segment devoted to trade and development for Africa’s prosperity.  United Nations Secretary-General Ban Ki-moon chaired the debate, which featured a panel of Heads of State and Government.

Statements

BAN KI-MOON, Secretary-General of the United Nations, said in his opening remarks that the international community was facing a “development emergency” -- well past the midpoint in the race to achieve the Millennium Development Goals, many countries were falling behind.  Most at risk was sub-Saharan Africa, where not a single country was on track to meet all of the targets by 2015.  At the same time, advances on specific Goals in individual African countries suggested that rapid progress was certainly possible.  Ghana, the host of UNCTAD XII, was an excellent example, having made significant strides in increasing primary school enrolment, as had Kenya, the United Republic of Tanzania and Uganda.  Elsewhere, Senegal was making great strides towards meeting the water target, while Niger, Togo and Zambia had made impressive progress in malaria control through the free distribution of bednets.

“These success stories need to be replicated and scaled up across Africa with effective support from the international community,” he said, adding that his recently convened MDG Africa Steering Group was preparing detailed recommendations for how those successes could be implemented across the region.  A scaling-up of global development activities required unprecedented effort, but it was achievable.  African economies had performed extremely well in recent years.  Their growth and strong macroeconomic fundamentals provided a solid foundation for a concerted push towards the Millennium Development Goals.  “Existing commitments are enough to achieve these Goals, so the focus must now be squarely on implementation,” he said.

Stressing that the benefits of globalization, especially increased trade and investment, were among the surest drivers of long-term growth and human development, he expressed regret, however, that Africa had yet to benefit fully from those worldwide trends.  Its share of global trade and foreign investment languished at a mere 3 per cent.  “A sure way to boost this figure is by ensuring a rapid breakthrough in the Doha Round, one that incorporates a significant development component.  South-South exchanges, greater foreign direct investment, enterprise development and crucial infrastructure advances facilitated through “aid for trade” could also help spur Africa’s progress.

For their part, African Governments that were benefiting from the current boom in commodity prices needed to increase spending on the Millennium Development Goal target areas and promote broad-based development.  International donors could help those countries navigate that path through increases in official development assistance -- increases that had been pledged, but had not so far been forthcoming.

“The MDG challenge has been complicated by the alarming rise in global food prices, he continued, stressing that the high prices threatened to undo the gains achieved so far in fighting hunger and malnutrition.  They called for a substantial increase in investment and expenditure in agriculture, and underscored the importance of pushing for an open system of trade in agricultural commodities, which would benefit countries around the world.  “I have been especially troubled by incidents of food riots, here in Africa and around the world.  Today, I urge you all to consider bold measures to guarantee affordable food to even the poorest of the poor.  Feeding women and children must be our priority.”  The World Food Programme (WFP) had already issued an extraordinary emergency appeal for $755 million to sustain food rations to some of the world’s most impoverished regions and all donors should help sustain that critical initiative.  In the medium term, a substantial increase in expenditures on agriculture was needed.  In particular, trade and investment should be used to bring about a “green revolution” of improved agricultural productivity across Africa.  Today’s high commodity prices presented a unique opportunity to reduce trade-distorting subsidies and tariffs on agricultural products.  Developed nations should do more on that issue in the Doha Round negotiations.

SUPACHAI PANITCHPAKDI, Secretary-General of UNCTAD and Moderator of the panel, said that, so far, high growth rates had not produced the jobs or poverty relief they should have.  It seemed as though economic theories had not helped very much, as they had failed in Africa.  Fresh, pragmatic approaches were needed.

JOHN AGYEKUM KUFUOR, President of Ghana, said there were lessons to be learned from the economic growth of Brazil, China and India.  There were already forums in which cooperation between those and other developing countries, or so-called South-South cooperation, was coming to fruition.  The partnership between African countries and the United Nations must be reinforced in order to achieve the Millennium Development Goals by 2015.  A partnership of shared goals between African countries and bilateral partners must be mutually beneficial, but help Africa put in place the necessary infrastructure, investment funding and other capacities to help the continent integrate better into world production and trade systems.

LUIZ INÁCIO LULA DA SILVA, President of Brazil, said Africa’s economic growth and development faced complex challenges, pointing out that, while the continent was home to some 30 per cent of the world’s population, it participated in a mere 1 per cent of global trade.  Yet, Africa was a continent of hope, where some countries were growing faster than many in the developed world.  The international community must support that emerging dynamism by stepping up efforts to ensure that the globally agreed official development assistance target was met.

He went on to call for increased South-South trade and for the identification and implementation of innovative, equitable trade policies so that the developing world could participate more actively in global trade.  Brazil was actively seeking partnerships with commodity-producing countries throughout Africa to enhance their growth and economic development on a path that did not involve subsidies or tariffs.  The country’s experience in biofuels could be replicated in many African countries and its production methods did not harm the environment.  Rather, it helped to reduce carbon dioxide emissions, while enhancing productive capacities.

There was also a need to ensure that African and least developed countries were shielded from the current food-price spike, he stressed.  To that end, it was important to ensure that developing countries were helped to diversify their commodity production, enhance their agricultural capacities and create full and productive employment.  UNCTAD could help identify partnership opportunities and relevant strategies in those areas.  Africa was Brazil’s fourth largest partner in a relationship that had seen their trade quadruple to $20 billion over the past four years.  The partnership went beyond economics, because Africa and Brazil shared ethnic, historical and cultural ties.

TARJA HALONEN, President of Finland, said the increase and diversification of trade and investment flows could certainly boost the prosperity of a nation, as borne out by her country’s experience in becoming a prosperous welfare State.  African countries needed support and an exchange of experiences from both its North-South partners and South-South partners.  Good governance was also essential and it could not be imposed from the outside, though countries could all learn from each other.  Africa had exhibited positive trends in that regard, and UNCTAD could assist in strengthening that trend in the interest of creating strong business environments on the continent.

At the global level, there was a need to remove obstacles in order to allow African products to thrive on the world market, she said, adding with regard to regional partnerships, that, just as there was a new Africa, there was a new Europe.  The partnerships between the two continents should become even stronger.  Education was a key factor in economic competitiveness, while innovation and information and communications technology were also essential.  There was no secret key to success, particularly in technological ventures, other than “education, education, education”.  It must also be remembered that all economic progress must occur on a sustainable basis, while protecting the environment to ensure lifestyles were maintained.

ERNEST BAI KOROMA, President of Sierra Leone, said that, since 2004, African countries had posted commendable growth rates, averaging about 6 per cent per year.  That growth must be supported by robust trade and Africa must “turn a corner”, so that it could participate equitably in global trade markets.  Africa had a lot of catching up to do and needed bold strategies to redirect investment into areas that boosted key sectors such as infrastructure, technology and agriculture, “so that we will be able to feed ourselves”.  While the region’s steps to ensure self-sufficiency must be bold, they must also be brave.  Indeed, while change was never easy, it was clear that the status quo must be modified within Africa and the global environment.  The starting point for the continent was promoting zero-tolerance polices towards corruption.  Experience had proved that in countries where corruption was tackled head on or stamped out completely, confidence increased and investment jumped, both locally and internationally.

The global trading system was disadvantageous to Africa in many ways, including the imposition of crippling subsidies by the developed world, and matters relating to intellectual property rights, he said.  Addressing those issues required unyielding support from organizations like UNCTAD and the World Trade Organization, which could help ensure that Africa participated on a relatively equal playing field.  Trade was an important engine of growth and development at both the macro and micro levels.  Unlike aid, which often took a while to trickle down to the “farm-gate” level, trade provided opportunities for all to improve their livelihoods.

He appealed to African nations to prioritize regional integration and domestic trade in order to facilitate investment, encourage technology transfer and support institutions that promoted trade inside and outside the continent.  It was also important for conflict-affected and post-conflict countries to educate and train their citizens, so as to ensure the development of a well-prepared, well-equipped and adaptable workforce that strove to ensure quality.  In addition, financial and commercial entities must cater to the needs of Africa’s enterprise class and fledgling capital markets.  Africans should also consider reducing hindrances to trade, since it made no sense for companies doing business in the region to spend hours filling out forms or waiting weeks for goods to cross borders, which made Africa uncompetitive.  While the time had come to take steps that would put the continent on the path to self-reliance, every bold step required the unflinching support of partners such as UNCTAD.

ANA VILMA ALBANEZ DE ESCOBAR, Vice-President of El Salvador, said that, as her country had struggled for many years to achieve political and economic stability, particularly following its long civil conflict, it had relied too heavily on commodities such as coffee and cotton, while burdened with a 60 per cent poverty rate.  In order to progress, El Salvador had strengthened its institutions and followed through on reform programmes, privatizing many sectors and opening itself up to private investment flows.  As a result, it was now known as one of the most transparent economic environments in Central America and growing quickly.

However, progress did not happen overnight and it was necessary to focus on linking economic growth to improving people’s lives and reducing poverty, she said.  For that reason, El Salvador looked for the right investors and concentrated on social and economic development.  Regional arrangements were also very important, and the development of regional infrastructure such as the energy initiative in Central America could be useful.  Building bilateral and regional trade partnerships, adding value to exports and diversifying and balancing agricultural production with other sectors had also been important to El Salvador.  Education had been a major additional focus, and whatever resources were available had been directed to that sector.  The most important factor to continued improvement was persistence in all areas.

BENJAMIN MKAPA, former President of the United Republic of Tanzania, said the post-colonial state in sub-Saharan Africa had emerged with a focus on the omnipotence of Government, with the private sector being considered marginal and economic growth seen as a public-sector affair.  With the stagnation of growth and the drying up of the funds on which that growth depended, it had become clear that the private sector had an important role to play, particularly in providing basic social services.

The entire continent had much work to do in strengthening internal policy reforms and increasing international, regional and foreign investment, he said.  One of the main challenges was establishing and sustaining solid, competitive, and accountable institutions, which were necessary for spelling out public-private relationships and supporting agencies that boosted Africa’s most precious sector -- agriculture.  There was also the urgent need to establish institutions that could effectively tackle HIV/AIDS, which continued to have a terrible impact on the continent.  Overall, the aim should be to nurture creative thinking, not cripple innovation.

The ownership of growth and development processes rested largely with the policy decisions taken by national Governments, he said.  At the same time, however, global factors like external financial shocks must be taken into account.  It was no secret that African economies were tied to the economies of the Group of Eight (G-8) countries.  Presently, many of those industrialized economies were on the verge of recession because of the current credit crunch.  The question for Africa, therefore, was whether its own economies would continue to grow if a sustained economic downturn gripped the industrialized world.  Rather than waiting to see how the current financial crisis played out, African countries should begin to redesign and reform their own mechanisms and institutions, especially to protect their fragile “building blocks” of growth.  Sub-Saharan Africa must maximize the effective use of resources, integrating the African diaspora into its development plans and scaling up initiatives with other African countries.  There was a need for wealth creation and sound economic management and macropolicies.  Africa’s reform leaders must embrace the courage to lead and to persevere.

PASCAL LAMY, Director-General of the World Trade Organization, said multilateral trade negotiations and protectionism on the part of Europe and America continued to stall global trade talks, as industrialized countries continued to dwell on their own employment “pictures”.  The same problems had existed in the 1990s, but it had been possible to negotiate new trade regimes.  It required courage to strike a deal.

The world was very different now and the new challenges were reflected in trade talks, he said.  The large, growing developing countries had more leverage, and an array of problems must be dealt with, including climate change and pandemics, all of which had both domestic and global dimensions.  The “rules of the game” must be changed if those problems were to be addressed more effectively.

Some trade rules, on transparency for example, must be preserved, he said, adding that others, such as those allowing agricultural subsidies, had to be changed.  Many of the needed changes were already on the table and they could all benefit Africa directly.  In recent weeks, negotiations had become more intensive and possibilities for breakthroughs may have been created.  It was a collective responsibility to conclude trade agreements that would improve the lives of people all over the globe.

KAMAL NATH, Commerce and Industry Minister of India, recalled that his country had hosted the India-Africa Forum Summit in New Delhi earlier this month, when the Government had announced a duty-free trade preference scheme covering all least developed countries, including those in Africa.  The scheme’s objective was to grant tariff preferences for products originating in the least developed countries, thus improving the trade opportunities for those countries and boosting their economic growth and development.

Under the scheme, India would gradually remove duties on 85 per cent of its total tariff lines in equal instalments over five years, he said.  It would also grant preferential market access on certain items from the launch of the scheme.  Items included in the scheme that were of immediate export interest were cotton, cocoa, aluminium and cooper ores, cashews and non-industrial diamonds.  The programme was open to all least developed countries, which should take urgent steps to express their intention to participate.  He added that a consultation mechanism had been created to help facilitate effective implementation of the scheme.

AHMED OUYAHIA, former Prime Minister and Personal Representative of the President of Algeria, said the march of globalization benefited producers of technological goods over those of commodities.  Africa had recently achieved its highest growth in recent decades through commodities, yet many of its countries remained vulnerable to crises and cycles.  Infrastructure was needed to change that situation, but external factors were also at play.

Africa’s share of global trade remained marginal and its exports remained excessively focused on commodities, he said.  Direct investment had not increased commensurately, and constraints on the movement of people and goods had also deprived the continent of the regulated movement between countries of people and skills required to diversify economies.  Aid in all those areas remained unpredictable.

On the positive side, conflicts in Africa had been decreasing and the continent now wished to take its place as a champion of peace and development, he said.  For that reason, Ghana’s hosting of UNCTAD XII was propitious and could encourage all African States to engage in a renewed push for a multilateral commercial system more tailored to the continent’s needs.

CHEICK SIDI DIARRA, United Nations Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, said that Africa, with its wealth of human potential and mineral resources, held the promise of becoming a major player in the world economy.  Indeed, despite numerous challenges, African countries were making strides to increase their productive capacities, introduce structural reforms and take their futures into their own hands with the creation and implementation of such programmes as the New Partnership for Africa’s Development (NEPAD).  But the region’s recent growth must be sustained and its benefits felt by the continent’s most needy and marginalized people.

Noting that growth was today threatened by the current food-price crisis, he said that with a credit crunch heralding an economic slowdown in the West, many African countries might fall further behind in their efforts to achieve internationally agreed development targets.  At the same time, even as globalization advanced, the majority of countries in sub-Saharan Africa lacked the basic building blocks that would allow them to take advantage of its benefits, especially in the areas of human resources and technology.

Trade-related capacity-building was therefore necessary to spur sustained growth in the region and throughout the least developed world, he stressed.  It was also necessary to ensure that the commitments made by donor countries at Monterrey and the Gleneagles G-8 Summit were fully implemented.  Donors must take genuine steps to increase their share of official development assistance.  Hopefully, discussions at UNCTAD XII would lead to meaningful and pragmatic discussions on Africa’s needs and identify concrete actions that could be taken in cooperation with its development partners.

Discussion

In the ensuing discussion, Ministers and other officials stressed the importance of developing domestic markets and regional integration in Africa, as well as re-energizing the push to achieve the Millennium Development Goals, concluding the Doha Round of trade negotiations and building South-South trade links.

Many speakers stressed the need for UNCTAD XII to focus on all those areas, always taking into consideration their link to development in Africa.  Others highlighted the responsibility of African Governments to facilitate rather than hamper economic growth, and the importance of African ownership of all initiatives.  Several others spoke of the need to improve the investment climate in Africa and to ensure dependable and well-targeted assistance.  The diversification of economic pursuits also emerged as a major theme.

Mr. SUPACHAI, Secretary-General of UNCTAD, summarized the cogent points regarding the need for international action on trade and development in Africa; the need for economic integration; the importance of creating the right business environment; the need for more social investment, particularly in education; and the necessity of investing more in agriculture, the food supply and green technologies.

Mr. BAN, Secretary-General of the United Nations, thanked all the panellists for sharing their experiences and insights, pointing out that all had agreed on the need for urgent actions to achieve the Millennium Goals, confront development emergencies and create an equitable international trading system.

If there was a lack, it was in translating such agreement into action, which must change, he said.  Those who believed in free trade must not tolerate a global trading system rife with unjustified tariffs and subsidies, and those who believed in the Millennium Goals must not tolerate mothers dying in childbirth.  However, the window for decisive action was closing fast.  “So let us seize this moment and let us deliver for the people of Africa,” he said in conclusion.

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For information media • not an official record