June 5, 2002—World Bank President James D. Wolfensohn called on the leaders of the Group of Eight industrialized nations yesterday to earmark over half of the new aid promised at the UN's Monterrey Conference in March, to Africa. The continent currently faces immense challenges, ranging from the HIV/AIDS pandemic to the lack of basic services like education, health, and safe water.
Addressing a forum hosted by the Washington-based nongovernmental organization umbrella group InterAction, Wolfensohn also urged the G8 leaders to lower their trade barriers to African exports, a step that would complement and enhance rich country pledges of new aid outlined at the Monterrey Conference.
Agricultural subsidies to rich country farmers alone, at around $350 billion, are worth seven times all the aid provided globally in 2000. Subsidies are not only driving down the prices of many agricultural commodities exported by African countries, but also force African governments to waste valuable funds on subsidies of their own, desperately propping up what would otherwise be world-competitive producers.
Wolfensohn said that while more aid, effectively delivered will be essential to supporting Africa's development, the leaders of the world's largest economies must heed the calls for freer trade coming steadily from African leaders, such as President Yoweri Museveni of Uganda, Prime Minister Meles Zelawi of Ethiopia, and Finance Minister Trevor Manuel of South Africa.
"Give us market access; give us a level playing field for our products and goods; give us a trade partnership that is more than just in name. That is what these leaders are saying. Is anyone listening? "Wolfensohn asked.
To show the world their determination to foster the proper investment climate, Africa's leaders have pledged to pursue a range of sound policies in the social, economic and governance areas, formalized in their New Partnership for Africa's Development (Nepad).
"African countries need to follow through on the Nepad agenda and work to break down internal barriers to trade and investment that limit the ability of farmers to market their goods within Africa," Wolfensohn said. "But we cannot ask Africans for more than we ask of ourselves. It is time to stop the hypocrisy on trade that says "do as I say, not as I do."
Ending subsidies on cotton, overhauling so-called rules of origin, helping developing countries meet international product standards, and removing inequities on international freight transport could add billions of dollars to African trade revenues, according to World Bank analysis.
If Africa is neglected, if its leaders are rewarded for their determination and initiative with inaction, the cost will be measured in human lives. On current trends, the number of poor in Africa will rise by 45 million over the next 12 years, and only nine countries out of 48 in Sub-Saharan Africa will be able to provide safe water to their people. "There are those who ask: If the problems are so intractable, why should we wager more resources on Africa?," Wolfensohn said, "To those people, I would pose my own question: What has been the global community's role in making some of Africa's problems seem so intractable? For what else do we make of the fact that at a time in the 1990s when most African leaders were putting better policies in place to achieve economic growth and poverty reduction and while rich countries prospered, foreign aid fell from $35 a head to $19 over the last 10 years. At a time in the 1990s when African countries were putting better policies in place, non-oil commodity prices fell by 33% wiping out millions of dollars from many African economies. At a time in the 2000s when rich countries are beginning to recognize Africa's progress, agricultural subsidies in those same rich countries are on the rise, threatening much of Africa's exports and precipitating likely reciprocal actions across the globe."
Wolfensohn also called for much better harmonization of donor policies, measurement and an end to the practice of tying aid to donor exports. " If we are serious about effectiveness, OECD leaders must commit to harmonizing the procedures and requirements that impose these heavy costs on the countries we are trying to support. If we do not change, we will have more and more flags on individual programs, more and more tripping over each other to fund the fashionable at the expense of the fundamental… If we do not change, we will continue to have more than half the aid delivered to poor countries 'tied' to donor exports. If we are serious about effectiveness, we must call 'tied' aid what it is - designed more for domestic constituencies at home than developing countries' and end it; and we must put effective curbs on pushing inappropriate exports tied to inappropriate financing that can only lead to a repeat of debt crises."
Wolfensohn also announced that today the Bank is co-hosting a two day roundtable in Washington, the first of its kind bringing together all the multilateral development banks, the Development Assistance Committee of the OECD, the UN, the IMF and developing country representatives on ‘Better Measuring, Monitoring and Managing for Development Results, to do a stock taking on evaluation and discuss the way forward. "This is not about finding flashy results or quick returns. Nor is it about going for the simplistic at the expense of what is meaningful. It is about seeing how we can work more closely together to manage for measurable results." This is a very important effort to review the work done by the international institutions and the bilateral government on measuring the effectiveness of their efforts and will be followed by a similar effort to reach out to civil society, he said.
Wolfensohn also called on rich countries to commit to Africa over the long haul, given the fact that deep-rooted reform may take at least 5-10 years and that there are no quick fixes. "No walking away when things get tough, no falling back on Africa's intractability , no saying that trade matters more than aid, and then making it harder and harder for Africa to receive either." Rich countries must support the efforts of African leadership to move constructively and consistently to achieve results from the Nepad Initiative and to secure the objectives of the Millennium Development Goals, he said.
The leaders of the Group of Eight will gather in Kananaskis, Canada, June 26-27, and will hear presentations from several African leaders, asking for support to back the implementation of the Nepad strategy.
"Give us market access; give us a level playing field for our products and goods; give us a trade partnership that is more than just in name. That is what these leaders are saying. Is anyone listening? "Wolfensohn asked
"African countries need to follow through on the Nepad agenda and work to break down internal barriers to trade and investment that limit the ability of farmers to market their goods within Africa," Wolfensohn said. "But we cannot ask Africans for more than we ask of ourselves. It is time to stop the hypocrisy on trade that says "do as I say, not as I do"