Briefing by President Thabo Mbeki at the World Economic Forum Meeting: Millennium Africa Renaissance Program - Implementation Issues, 28 January 2001

It is significant that in a sense the first formal briefing on the progress in developing this programme is taking place at the World Economic Forum meeting. The success of its implementation would require the buy in from members of this exciting and vibrant forum!

The MAP programme is a declaration of a firm commitment by African leaders to take ownership and responsibility for the sustainable economic development of the continent. Our starting point is a critical examination of Africa's post independence experience and acceptance that things have to be done differently to achieve meaningful socio-economic progress, with out which it would not be easy to achieve our historic task of improving the lives of our people.

Our programme contains a vision, perspective and the outlines of a plan for the redevelopment of Africa. It clarifies our objectives and approach to development projects that are going to be appraised, further developed and negotiated with our partners in Africa and the rest of the world during the next few months.

We have developed the outlines of a concrete programme of action that is multi-faceted and priority areas it would cover include:

• Creating peace, security and stability, and democratic governance without which it would be impossible to engage in meaningful economic activity;
• Investing in Africa's people through a comprehensive human resource strategy;
• Harnessing and developing Africa's strategic and comparative advantages in the resource based sectors to lead the development of an industrial strategy;
• Increasing investments in the Information and communication technology sector without which we would not be able to bridge the digital divide;
• Development of infrastructure including transport and energy; and
• Developing financing mechanism.

The objectives we want to achieve through its implementation include the acceleration of efforts to eradicate poverty on the continent and to significantly increase new investments by mobilising both domestic and especially foreign savings.

Participating African leaders would form a Compact committing them to the programme and a Forum of Leaders who would make decisions about sub-programmes and initiatives and review progress on its implementation. Every attempt will be made by the forum of leaders to be inclusive of all countries that agree to the elements of the Compact.

The plan envisages both Africa wide and regional initiatives. Conflict prevention and eradication of infectious diseases are examples of programmes that will be continental in scope. Economic development initiatives like the development of agriculture and agro-industries, economic infrastructure, promotion of competitiveness and economic integration will be managed at regional or sub-regional levels.

Another continental initiative would be the development of regulatory frameworks for key sectors like telecommunication and energy. The Africa Connection (the telecommunication strategy for Africa already agreed to) is a case in point. The adoption of the Africa plan will accelerate implementation work of this project.

African governments are already working together on conflict prevention and resolution. The organisation of African Unity has taken firm resolution to discourage usurpation of power and military coups and has taken concrete action to resolve conflicts in many parts of the continent.

Another important prerequisite is a partnership with the rest of the world, especially the developed countries, multilateral institutions and (global and national) private sector players. We have already engaged western political leaders and we feel confident that is considerable goodwill and commitment to our programme from them.

In a world where perceptions irrespective of the reality appears to be everything we would have to give significant attention to counter the erroneous legacy of Afro-pessimism. We see a clear role for the many foreign business people who have profitable ties with Africa.

For a range of complex reasons African countries (with a few notable exceptions) have weak states. An essential step in the implementation of the programme would be to strengthen capacity of these states. We see the need to create a continent wide programme to develop this capacity with the support of developed countries, the private sector and multilateral institutions.

The focus of the program is not increased AID but increased investments in viable infrastructure and business opportunities. Targeted aid and technical support to address capacity constraints and urgent human development priorities would also be required.

Participation will be open to all African countries prepared and ready to commit to the underlying principles guiding the initiative. We intend to brief all African Heads of State over the next few months. Our aim is to be as inclusive as possible. Thereafter substantive consultations with leaders of the developed countries and multilateral institutions would take place.

This is the first briefing of international business leaders. It will be followed by other briefings and consultations, both at country and regional levels. The implementation of the plan will commence as soon as briefings have been completed and commitments made by a critical number of African countries. This point, we expect would be reached within the next six months. Countries that are not ready will be welcome to join later.

In the preparation of detailed plans support from institutions like the African Development Bank, the World Bank and the United Nations Commission for Africa would be requested. Account will be taken of major development initiatives like the Strategic Partnership with Africa (a World Bank led initiative), Poverty Reduction Programme Papers (led by the IMF), and Cairo Action Plan (the EU -- Africa Partnership), etc.

Full account will be taken of planning that has already been done on projects and programmes that are in line with the new plan. The call on business leaders is to partner Africa in her resolve to claim the 21st century. The commitment to make Africa the preferred destination for both domestic and foreign investors is very deep. Today we are inviting business to work with us in creating the necessary conditions.

We propose a Global Partnership for Africa's development and inclusion in the world. This poses a challenge and an opportunity to all countries of the world. The continued marginalisation of Africa from the globalisation process, and the social exclusion of the vast majority of our people constitute a serious threat to global social stability. Simultaneously the establishing of sound governance at the global level remains incomplete, but is essential for the sustainability of the globalisation process. Implementation of our programme will not only be a major step forward in developing effective global governance but also make a profound contribution to the future welfare of the entire globe.

Thank you.

Enquiries: Nazeem Mahatey
082 376 3820 (SAPA)
www.weforum.org

ADDRESSING THE BACKLASH AGAINST GLOBALISATION - A Southern
perspective of the problem

(Remarks by President Thabo Mbeki, World Economic Forum, Davos, 28 January 2001)

1. In order to develop a response to the current backlash against globalisation we need to be clear on what we mean by globalisation and understand the reasons for the backlash against it.

2. By globalisation, which we see as an evolving and ongoing historical process, we mean the integration of national systems of production and finance. It is driven by policies of liberalisation in trade and finance. It is embodied in an ensemble of international relations and institutions, at the apex of which are the multi-national corporations, multi-lateral trading and financial institutions like the IMF, the World Bank and the World Trading Organisations (WTO). Faster globalisation is reflected in the incredible growth in the size of cross-border flows of goods, services and capital.

3. The impact of globalisation is extremely uneven, both within and between nations. It implies rising inequalities within countries (because of the shift in labour demand); it leads to greater polarisation across countries (e.g. R & D, knowledge production remain concentrated in a small body of already industrialised countries and tends to reproduce their competitive advantages); and has resulted to greater vulnerability to macro-economic shocks (developing countries seem to be especially vulnerable) that lower growth and employment rates resulting in widening the gap with developed countries.

4. The concern of countries of the South is largely a response to this structural divide between the developed and developing countries and as a result globalisation is -
* Perceived to be a system (meaning the institutions that typify it) in which the strong countries/nations advance their national interests to the detriment of the weak nations, especially in the area of trade;
* Accused for having led to the worsening the conditions of life of the marginalized. It is blamed for the deep structural poverty in which half the world's population live on less than $2 per day and a fifth on less than $1;
* Blamed for the untenable debt situation that has risen in many of the low income developing countries;
* Blamed for the periodic financial crises that spread with great ferocity and seem to affect more seriously, developing countries like the recent Asian contagion; and
* Said to have led to the profound fissure between economic inclusion and social exclusion that has emerged within and between nations.

5. The choice for countries of the South is not whether to engage with globalisation or not, but how to engage with it. It is essential for governments and people to engage with the process critically, to re-shape and re-direct its impact. The objective must be to enhance citizens' incorporation and access to the benefits of globalisation, while minimising polarisation and social exclusion, and mitigating these effects when and where they do occur.

6. There is also a concern that that the WTO (seen to be one of the key institution of globalisation) and industrialised countries are very susceptible to pressure from protectionist groupings like organised labour, the agricultural lobbies and manufacturers involved in the "grandfather" industries (steel, textiles and clothing).

7. In order to address the backlash there are a number of imperatives that we need to address. These are now briefly dealt with.

8. The first key challenge is the reform of international financial and trading institutions to take on board the concerns of the countries of the South. For example in regards to the WTO there is a need to re-examine their rules (governing intellectual property rights, dumping and countervailing measures, subsidies, etc.); the agreements governing market access may ne!ed to be renegotiated so as to benefit both developing countries and developed (perhaps they need to favour developing countries!); and the structures of governance require reform to give greater weight to the concerns of th!e countries of the South. In a sense this would lay a basis to address the profound imbalances in the structure of the global economy. In this regard we think the delay in restarting the Millennium Round of the WTO after the Seattle debacle is unnecessary and unfortunate!

9. Another challenge is that Governments of developed countries need to do more to expand access to their markets for developing countries' products by lowering tariff exemptions and also providing exemptions from the many non- tariff barriers. In this regard the developed countries need to provide support to developing countries to comply with their sanitary and phyto-sanitary measures governing their imports.

10. Another important challenge is how to ensure greater mobilisation of resources for development in countries of the South. Here there are two matters that require attention.

11. The first of these relate to the expansion of the Highly Indebted Poor Countries (HIPC) initiative so as to include more countries and a larger share of countries' debt. Debt relief should be granted more quickly and should be tied to development targets and outcomes in relation to poverty reduction, reform of institutions of governance.

12. The second relates to increasing the rate of flow of (private) foreign direct investments (FDI) to developing countries, especially to Africa (Net FDI inflows to Sub-Saharan Africa averaged less than 0.7% annually in the 1990s, compared with an average for all developing countries of over 1.2%).

13. Clearly to increase the flow of such foreign savings (as well savings of Africa's private investors, many of whom also prefer to hold their wealth outside the continent!) would require developing countries to lower risk perceptions of potential portfolio and direct investors, by improving credibility of public financial authorities and the soundness of public and private financial institutions.

14. Finally, there is a need for a renewed commitment to partnership between the international social partners that entails a shared responsibility to eradicate poverty, social exclusion and marginalisation. On the part of developing countries this means a commitment to create conditions of peace, stability and good governance.

Thank you.

Enquiries: Nazeem Mahatey
082 376 3820 (SAPA)