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close this bookThe Courier N 150 - March - April 1995 - Dossier: Refugees - Country Reports: The Bahamas, Guyana (EC Courier, 1995, 104 p.)
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View the documentSADC-EU Mining Forum in Lusaka
View the documentThe challenge of pluralism, democracy, governance and development
View the documentWorst jobless crisis since the 1930s says ILO

SADC-EU Mining Forum in Lusaka

In the September 1994 issue of The Courier, the European mining industry was challenged to regain some of the ground lost in Southern Africa to investors from other regions. The call seems to have been heard loud and clear, judging by the spectacular turn out at the first SADC-European Union Mining Forum held in Lusaka from 7 to 9 December. With almost 300 SADC and European mining operators and investors (50% above target) and over 20 major institutions present, the organisers were justly proud of their success

The Forum was funded by EDF regional funds and placed under the dual sponsorship of the EU and SADC. Preparatory work, which began in 1992, involved various fact-finding missions and consultations in both the SADC region and Europe No fewer than 21 consultants (14 from SADC), were involved in these activities which were coordinated by the EC Commission (DG VIII) and the SADC Mining coordination Unit (MCU). They included identifying 185 mining projects at different stages of development. elaborating detailed and updated country files (covering mining policy, the environment and mineral potential) and promotional work.

Care was taken to choose applicants meeting strict selection criteria: they had to be bona fide investors with the necessary financial and technical capacity, and motivation Since South Africa only joined SADC in August 1994 and because of its more advanced stage of industrial development, it was invited as an 'investor' country, on the same basis as the EU Member States. On the European side, invitations Lo participate were also made to mining investors from three countries which have since joined the Union (Austria, Finland and Sweden) as well as from Norway. A limited number of participants from third countries, selected by the World Bank's Multilateral Investment Guarantee Agency, were also invited.

The Forum was threatened when, just a week before it was due to open, Zambia Airways collapsed. Disaster was averted by some last-minute flight rescheduling and the organisation of three special charters for SADC participants. A number of those attending made private arrangements with some driving several hundred miles to be present in Lusaka.

Participation alone is a major factor in the success of such an event and on this basis, there is cause for satisfaction, in both quantity and quality terms. 153 SADC mining promoters and licence holders, 1 10 European investors and financial institutions (including some of the largest 'players' in the mining world), 15 South African enterprises and 8 investors from third countries were present There were also participants from leading development banks and finance corporations, as well as more than 100 public officials (mainly from SADC) and six ministers with mining portfolios.

After inaugural speeches by senior SADC and EC representatives, the Forum was formally opened by the Zambian Vice-President. The remainder of the first day was devoted to SADC country presentations. The core feature of the Forum, the individual promoter-investor meetings, were highly successful with 1500 taking place during the following day and a half Throughout, there was a great deal of activity around the SADC country booths where promotional material, geological maps, background data and video presentations were available The ACP-EU Centre for the Development of Industry (CDI) demonstrated the manufacture and uses of compressed earth bricks and also played an active role in promoting the ornamental stone sector while the MCU arranged a gemstone exhibition and sale.

In parallel with the individual meetings, three workshops were held on mining finance. mining legislation (with the assistance of the Commonwealth Secretariat) and dimension stones (organised by CDI) Discussions in each work shop were led by a pre-arranged panel of high level professionals and institutions. Attendance and interest was high and the groups attracted a total of about 300 participants.

On the spot evaluation of the Forum confirmed the general impression that the formula was the right one, designed for the right people and held at the right time. The recent rise in mineral prices and the positive changes in south Africa played their part in the unexpectedly high turnout Some 95% of participants found the Forum to have been worthwhile and more than 90% indicated they would attend another event of a similar kind. Interestingly, European participants were generally more satisfied than those from SADC, many of whom were primarily seeking concessionary funding for their projects This augurs well for future investments in Southern Africa but points to the need for finer tuning of promoter identification.

By the closing day. at least ten promoters were reporting that their projects had attracted serious attention from one or several investors and that further developments had been planned One project alone was being considered by 21 European companies. The CDI announced that of 45 projects presented at the Forum, 22 were the subject of specific business proposals. But this is just a beginning A full-scale follow-up, including specific monitoring and evaluation activities, has already been planned. Since mining projects need time to mature, it will only be by the end of 1995 that it will be possible to assess the Forum's results in terms of actual mining investment and joint-venture agreements.

So much has been said about the unfavourable investment climate in Africa that the Forum's success should not be underestimated. Two immediate conclusions can be drawn from the experience First, the African mining sector has growth potential and second. future ACP-EU fore could usefully refer to the formula used in terms of specialisation and approach. Above all, the event shows that Africa still has a future as a place for foreign investment.

The challenge of pluralism, democracy, governance and development

by Professor Adebayo Adedeji

Africa in transition

To my surprise and disappoint' meet, public administration has not survived the decay and decadence that was the plight of sub-Saharan Africa throughout the 'lost decade' of the 1980s. Its effectiveness has : become, in most countries, severely impaired Over the years since independence in the 1960s, African countries generally have exhibited the characteristics of a 'soft' State as defined by Gunnar Myrdal in his 'Asian Drama'. These are the circumvention of laws and regulations by officials and the Inconsistent application of policies and laws; the secret collusion between civil servants and politicians or between civil servants and the military, where it is the military that are in power, against the public interest. and. the use of corruption to secure objectives other than those officially sanctioned.

During this period, public administration and management in most of Africa has moved further away from Max Weber's definition of 'rational' bureaucracy, which had existed during the colonial era when government was generally limited in size and functions. and has conformed more closely and explicitly to Fred w Rigg's 'ecological' approach which focuses on the limitations inherent in the social and political environment of public administration.

It must be admitted that in the 1960s and 1970s we completely ignored the ecology of the bureaucracy approach. we down-played it in favour of development and social engineering through the various institutes and schools of public administration that had been established after independence. We opted for a system and culture of development administration that could meet the challenges of rapidly expanding government operations and their growing involvement in the development process. lt was our perception that such a development-oriented public service would also conform to the Weberian definition of rational bureaucracy i.e. the application of the norms of professionalism, universalism, detachment and strict objectivity in policy analysis and decision-making with a hierarchical pattern of supervision and an information system which ensures continuity and certainty.

Hence, the main thrust of administrative reforms during the first two post-independence decades was on structure organisation and the internal administration values of the political system or opening that system to broader popular participation Although we had perceived development administration as being capable of providing the catalyst for change in the developing, transitional societies of Africa, unfortunately most reform measures were more focused on the conventional administrative development aimed primarily at improving the instrumentalities of administration

As it turned out, administrative reform became a main ingredient in circumventing critical issues and in frustrating large political and socio-economic reform. Proceduralism and technicalities took precedence over objectives and reform became an aesthetic and rhetorical exercise, quite harmeless to the status quo.

That is why, when the economic crisis assumed such a threatening proportion in the 1980s, the state bureaucracies were unable to meet the challenge it posed. The public services, weakened and ineffective as they had become, were burdened and dominated by the ever-growing concern and preoccupation with short term crisis management almost to the exclusion of the pursuit of long-term objectives. Worse still, senior officials were shunted aside and marginalised as the role of foreign experts and managers, particularly officials of multilateral development institutions, in national economic decision-making and management became predominant. With this virtual taking over by foreigners, the scope for independent policy-making disappeared. As if this was not enough, the downsizing of these services, which was required by SAP, threw them into complete and total disarray and paralysis, and the devaluation of their labour through the devaluation of their national currencies gave overt encouragement to moonlighting and barefaced, shameless corruption, even in high places.

Thus. today. bureaucracies in Africa have lost their dynamism, resilience and commitment. Instead, they have become stagnant, dependent and largely unproductive. Good, humane governance has become a thing of the past in many countries. Those who exercise power are busy inflicting injury on their people because ethics and morality have disappeared from governance and indeed from public life.

Lack of real political and financial accountability is a major bane of Africa It breeds irresponsibility among public officials and leads to resistance and cynicism among the citizenry Since the weak are in no position to enforce accountability on their rulers, they naturally bend all their ingenuity to the evasion of power and inevitably to the evasion of law, if not its direct and open breach. Throughout all ages, this has proved to be the most devastating answer that the poor could give to the irresponsibility of their rulers.

Africa remains in transition

Since independence, our political process has been in transition We experimented with the Westminster model of political system handed over to us at independence before replacing it with one-party political systems and presidential government. In many countries, the military have aborted the development of the political process through their intervention. The Nigerian experience is symptomatic-six successful coups d'etat and nine military administrations since independence. Out of the 33 years of independence, the military have been in power for over 24 years. It is even worse in Togo and Zaire where the military have been in power for an uninterrupted period of over 30 years.

Economically we have not fared better and in many respects there has been retrogression In spite of more than a decade of SAP, the African economic condition has remained critical. Per capita income has continued to fall, the export sector is depressed and the burden of debt remains excruciating Population growth is still very high and given the technological backwardness of the food and agricultural sector, Africa is becoming increasingly dependent on food aid and imports for the survival of its people.

At the root of Africa's economic malaise is the failure to pursue and achieve any fundamental transformation of the structure of the economy. The continent has yet to rid itself of its mono-culturalism and commodity export dependence. Efforts at economic diversification have been severely set back by SAP which, by requiriny that the underdeveloped economies of Africa maintain an open door policy devoid of any protectionism, has spelt the doom of the nascent industrialisation process embarked upon in the 1960s.

To avoid any misunderstanding, let me repeat what I have said again and again about the need for adjustment. It is imperative for every country to adjust to changing circumstances be they endogenous or exogenous. But such an adjustment must not be at the expense or to the detriment of long term transformation and development. Any adjustment programme that puts on hold or deviates from the long term transformational path will keep the economies in a permanent state of disequilibrium and debilitating paralysis. Unless and until the structure of the African economy is transformed and diversified, until factor inputs are primarily and overwhelmingly endogenous and the development paradigm is people centred and holistic, sustainable development will remain out of the reach of Africa.

Such a transformation process will be aborted unless it is supported by a corresponding political process which assures human rights, political stability, political empowerment, public accountability, etc. The mistake which has been made for so long is to divorce our economic crisis from the political crisis arid to deal with both separately and in isolation.

From transition to transformation: pluralism and democracy

Today, the word 'pluralism' is back in popular debate, albeit qualified by another word 'political'. But qualified or not, pluralism has. for centuries, been a way of life in Africa. Africa is a pluralistic society par excellence.

The multi-ethnic nature of sub-Saharan Africa is so complex and bewildering that because foreigners, particularly Europeans, had tremendous difficulties in comprehending it, they denigrated it. But many of the so-called tribes have populations larger than some of the European nations. For example, the Yoruba are about 20 million strong while the Hausa-Fulani number 25 million or more Because of the colonial scramble for Africa and its partition by the colonial powers in a most reckless and inhuman manner, which paid no regard whatsoever to history, culture and ethnic homogenity, virtually all the nation states of sub Saharan Africa are multi-ethnic and multi-national.

During the colonial era. ethnic divisions were exploited by the colonial authorities to delay independence. Consequently, political pluralism has reflected and exacerbated ethnicism as ethnic-based, rather than genuine national, parties have tended to emerge. It was to arrest this development that a one-party system developed in a number of countries after independence But all that was achieved was suppression of ethnicism rather than its eradication and the evolution of nationalism in its place.

In such circumstances, it is understandable that those who have been excluded from the decision making process should opt for a more open system. Hence their commitment to pluralistic democracy. For them, pluralism essentially entails the transformation of the one-party regime into a multi-party political system. Indeed, external pressures have been mounted in favour of multi-party systems in Africa. This is now seen in the countries of the North as a basic condition that must be satisfied by a pro-democracy movement in Africa. So strong is the pressure from Western Europe and North America that political pluralism is widely becoming a new conditionality for Western aid. But the fundamental question of how liberal democratic pluralism can be achieved without exacerbating the tensions inherent in ethnic-cultural pluralism remains unanswered.

To build a truly democratic society and culture takes a long period of determination and purposefulness on the part of the people and their leaders. As I commented in May 1992 on the so-called Nigerian transition to democracy:

'Democracy cannot be decreed. Unlike instant coffee, there is no instant democracy. You cannot move from totalitarianism to democratic practice from one day to another. Democracy is more than just the ballot boxes. the political parties and all the institutional trappings. It is a way of life, a culture and a lifestyle at all levels of society and in all spheres of human endeavour. '

The tragedy of Africa was the failure of post-independence African leaders, as the inheritors of the colonial state, to put in place a policy and programme of restitution. African leaders failed to make any attempt at rediscovering, acknowledging and acting upon their continent's wealth of collective wisdom whether in the form of social, economic and political organisation or in the form of knowledge or of ways of thinking. I his failure largely accounts for the endemic crises that have confronted sub-Saharan Africa since independence.

Governance

It is not surprising-given the dismal state of its public service and of public administration and management- that what generally prevails in Africa today as systems of governance cannot be described as good. The will to govern fairly and humanely seems to have disappeared in many countries. The restoration of good governance is therefore most urgently and badly needed as it is the foundation on which the politics of restitution must be built

However, the capacity to govern has been severely hamstrung by SAP, one of whose fundamental tenets is that government should be rolled back so as to give way to the so called market forces. Unfortunately, in the name of adjustment, governments in Africa pursued retrenchment policies through which they lost not only a large number of junior personnel but also a substantial number of high-level experienced people

My own views about the folly of the policy of rolling back government in the name of marketisation in a typical African economy are too well known to need reiteration Given the stage of development of the average African countries. what should be the role of government and what kind of reforms would this necessitate? Some foreign proponents have suggested that solutions to the unprecedented economic crisis and to the fast changing public expectations within each country are to be found in the creation of an efficient but tightly-focused machinery of government. This argument holds that government should stick strictly to the business of macroeconomic management and the ensuring of public service delivery. It should have nothing directly to do with those large areas of socio-economic transformation except for laying down and clarifying the rules of the game.

Yet these same proponents are not tired of reminding us of the success stories of East and South-East Asian countries in the achievement of rapid economic growth. They equally consistently fail to link the economic revolution in these countries with two basic phenomena: first that governments in these countries have seen intervention in the markets in any areas of social or economic life as perfectly acceptable requiring no more than one single basic test does it work? and second that political pluralism and democracy are virtually unknown in these countries which have, far more than African countries, put in place a politics of restitution. Unlike our leaders, the Asian leaders realised early, even when the struggle for independence was still raging, that a society which neglects the instructive value of its past for its present and future cannot be self-confident and self-reliant and will inevitably lack internally-generated dynamism and stability. Consequently, the Asians have resisted adopting the European model of pluralist democracy.

Democracy and development

All these boil down to the basic point that the surest way to make people accept restitution, development and transformation challenges is if the people perceive these challenges as their own and accept the goals as a summary of their priority aspirations. Conversely, if the people perceive such goals and challenges as unjust and elitist, if they feel alienated and marginalised, and if their major aspirations for a decent life are not central to public policy, they will neither identify with nor implement bureaucratic programmes drawn up for them. This is why the development process is not. and cannot succeed as a mere technical and administrative process. It must also be a political process involving open debate and decision-making over resource allocation, policy design and execution. This democratic setting is the best framework for realising the optimum utilisation of capital and other productive inputs that must be controlled and applied by the people.

This demands a new partnership; a new consensus between the government and the people. The people in their social groups, mass organisations and as individuals must be seen and accepted by African governments correctly as social partners in development. In these ways, the popular forces of society can be relied upon to mobilise the necessary resources for the effective launching of the transformation process for the Second Liberalisation of Africa.

Worst jobless crisis since the 1930s says ILO

The world faces its worst employment crisis since the Great De pression in the 1930s, according to the ILO in its report 'world Employment 1995'. In 1994. about 820 million people were either unemployed or underemployed throughout the world - a situation which ILO Director-General Michel Hansenne describes as 'both morally unacceptable and economically irrational'. It is creating, he says, 'an enormous waste of resources and deepening human suffering'. Hardest hit are the developing countries which account for 95% of the 820 million.

The report, prepared for the March World Summit for Social Development in Copenhagen, warns that, except for a few countries, job-creation prospects remain gloomy throughout the world. Current growth trends will not 'be sufficient to cure Europe's endemic employment ills, reverse the decline in real incomes, halt the spread of poverty and underemployment in developing countries or prevent the marginalisation of Africa'

However, if appropriate economic policies are adopted both nationally and internationally, resulting in higher growth, joblessness in the industrialised countries (35m in 1994) could be halved in the next decade and the impact felt in the developing countries Mr Hansenne argues for an international commitment to full employment, such as was made after World War II. This will provide the basis for international cooperation, without which, he says, the present crisis will not be resolved.

Four key steps need to be taken. The first concerns trade liberalisation for which the new Gatt agreement provides the framework This treaty must be fully implemented if maximim benefits are to be derived from it. Tariff cuts will increase not only North-North trade flows in menu factured goods and job opportunities in the industrialised countries, but also North-South trade, which could fuel migration of low-skilled manufacturing jobs to the South. The agreement will liberalise, in particular, northern textile and other manufactured goods markets for the developing countries. Although the South in this regard will present a challenge to the North, the situation will provide the latter with countless business opportunities enabling it to create 'the next generation of jobs'. The report calls on developing countries to abandon 'failed policies of import substitution' and end the practice of allocation of scarce capital resources which creates distortions.

The second step relates to increased international cooperation in respect of financial markets, balance of payments problems and long-term interest rates. The overall objective will be to channel more of the world's savings to productive real investments and to achieve lower interest rates which are vital for investment and job creation. Foreign direct investment (FDI), the report notes, can be a powerful spur to growth and employment. Unfortunately, the vast majority of developing nations have received little of this in recent years: although, as a whole, developing countries attracted $70 billion in FDI in 1993, 70% of this went to just 10 advanced developing countries while the 47 least-developed received only a marginal and declining percentage. The need for LDC policies that favour FDI could not be greater. These policies must include 'economic and political stability, a favourable attitude towards private enterprise, and clear and transparent policies towards investors, especially multinational enterprises.' I he report recognises that creating the right environment for investment promotion will involve extensive (and unavoidable) reforms for many countries, including labour market reforms.

The third step is the adoption of export-led development strategies, which have proved so successful in economic growth and employment in test Asia However, the report warns developing countries to guard against 'artificial promotion or protection of activities which have no hope of becoming internationally competitive., More open economic policies should guide production and trade, but they should be in line with each country's comparative advantage.

The fourth concerns the labour market. The report rejects the argument that deregulation will resolve the unemployment and poverty afflicting most of the industrialised world Proponents of deregulation, it says, point to various features of market regulation in Europe- including strong unions, stringent protection and generous welfare provision as an explanation for high unemployment levels in comparison to those prevailing in the less regulated USA.

This, it explains, overlooks the fact that labour market performance has deteriorated in all OECD countries since the first oil shock of 1974 'irrespective of differences in labour regulations' The report also rejects the view that high wages in Europe are directly responsible for high unemployment. It admits. how ever, the need for positive adjustment measures to be taken to improve labour markets, including reduction of non-wage labour costs, retraining of workers and reforming unemployment benefit systems which, it acknowledges, have a link with the duration of unemployment. Generally speaking,'a 10% increase in benefits leads to a 3% increase in the average duration of unemployment spells.' The appropriate response, in Michel Hansenne's opinion, is to 'make it more profitable for firms to hire the long-term unemployed.'

The report warns developing countries to be on their guard in seizing the opportunities presented by the new Gatt agreement They need to adopt a balanced, two-pronged strategy aimed at generating more modern sector jobs, while upgrading the skills and living standards of the vast majority of the labour force in the low-productivity rural and urban sectors 60% of urban workers in sub-Saharan Africa are engaged in unorganised activities in the informal sector. Most are vastly underemployed. Given the magnitude of poverty and underemployment in the developing countries, the report says that it 'is important that development policies should not be biased against them and that measures to reduce unemployment and poverty be given priority in government programmes. '