Millie Tran

This paper was submitted for “Global Studies 100B: Globalization – Contemporary Issues” with Professor Russell Burgos, Professor David Rigby, Professor Dominic Thomas and Aron Ballard in Spring 2009. The PDF will be available shortly.

Globalization has increased communication and decreased transportation costs throughout the past decade, enabling countries to prosper and thrive. Why, then has African been left behind? This answer, multifaceted and complex, is crucial to understanding how Africa can develop further and catch up with the rest of the world. It has been proposed that regionalization, economic and political, is the solution for Africa. However, it is impetuous to prescribe a solely regional solution that depends on the security and stability on a domestic level. In the past, regional integration in Africa has been repeatedly met unsuccessfully due to domestic failures. Insecurities on the domestic level must be faced before regional integration can occur. In the past, different regions have pursued different goals of integration based on its own economic interests, rather than as a single vision intended for development of the continent as a whole. There are two possible solutions for Africa to begin the path towards development that is inclusive of quelling the domestic insecurities and also uniting the goals of the continent. First is creating an outwardly oriented economic model that promotes global integration, and second, a more open, democratic polity. Both factors are necessary as political security is a precursor for economic stability and both factors are manifested in the New Partnership for African Development (NEPAD).

Economic stability is defined as a lack of drastic fluctuations in the macroeconomy and can be characterized by relatively constant output growth and low and steady inflation. In Africa, the policies adopted after colonialism did not allow Africa room for growth or development. Economic policy mainly relied on import-substitution industrialization, focused on the reduction of foreign dependence of goods through local production of industrialized products. This growth strategy dwarfed Africa’s full development by creating inefficient and uncompetitive economies, with stunted private sectors. Currently, the continent is export-dependent on oil and non-oil commodities and is import dependent on manufactured goods, exposing it to adverse terms of trade. Africa’s position in the international market has been to export raw commodities in an unfavorable external trade environment, such as barriers to access in key markets (Qobo, 2007).

In the 1980s and 1990s, with the shift towards neo-classical policies, several African countries had structural reforms, but were not vigorously implemented as they were in other parts of the developing world. These exogenous stabilization programs were not as effective as those that were endogenously driven. Even still, the institutions for the reforms were too weak to sustain them into real developmental factors for the future. The international financial institutions did not foresee the decreased impact of the reforms in countries with weak institutional mechanisms. The lack of strong institutions along with weak political leaders and poor design of the structural adjustment programs are possible explanations as to why there have not been positive results. Similarly, in Europe, regional convergence occurred after difficulty and after the collapse of the Bretton Woods system in the early 1970s. It was only implemented when pivotal states such as France and Germany were in favor of the integration (Qobo, 2007).

Another reform agenda is unilateral trade liberalization. It has been argued that opening up a country’s economy too early or too much can be damaging. “The most adverse effects have arisen from the liberalization of financial and capital markets – which has posed risks to developing countries without commensurate rewards” (Stiglitz 210). However, with proper administrative policy measures aimed at strengthening social institutions and infrastructure such as health, education, and social welfare, trade liberalization will have a better chance of resulting in economic gains than a closed economy. A vibrant, growing and thriving economy will increase investor confidence in the short-run and allow for the regional integration to sustain and further development agendas. There should be a sharp distinction between “developmental regionalism as opposed to integration-focused regionalism.” Instead of placing emphasis on trade creation and trade liberalization, developmental regionalism stresses, “removal of supply-side constraints and infrastructure development and views trade in a more integrated manner, linked to domestic developmental challenges” (Qobo, 2007).

A generalized model to integration in Africa does not consider the unique circumstances and completely heterogeneity of each different regional group (Qobo, 2007). For example, regional economic blocks are remnants of the Lagos Plan of Action, which blamed Africa’s economic crisis on the structural adjustment programs of the World Bank and International Monetary Fund. It suggested that Africa needed to decrease reliance on raw material extraction, industrialization, global equality in trade relations and an increase in development aid from the international community, but it failed to assume accountability and responsibility to the domestic governments of Africa. Following again, the European model towards regional integration, “African countries should spend less effort and resources on the creation of an unworkable model of regional integration and more on undertaking far-reaching economic reforms and building the competitiveness of their own economies” (Qobo, 2007).

A successful economic model would then require strong governance and financial institutions that includes viable public service infrastructure. It’s this step that will act as a stepping-stone for capacity building in Africa. However, it is futile to attempt regional economic integration, as so many have argued, on the basis of weak domestic foundations. A marker of a successful and thriving state is an active, participative civil society, which can be defined as the total voluntary civic and social organizations and institutions that form the basis of a functioning society, independent of the systemic structure of a state or institutions of the market. Civil society can be understood as non-state actors that are able to voice a divergent political voice. Successful integration and therefore development will require political and macroeconomic reform, underlined by “infrastructure development, attracting and nurturing private economic activities, supporting socially and economically viable indigenous practices, and creating the right climate for the expression of a plural and divergent voice in civil society” (Qobo, 2007).

Sub-Saharan Africa currently lacks the minimal capacities to sustain complex economic policies. A lesson from East Asian countries is that capacity is built through trial and error, essentially a learning process. There must be constant reforms to create competency in a state bureaucracy and its parallel business sector (Akyus and Gore, 2001). A successful example is Botswana and its rare growth rate (7.7% annually between 1965 and 1998) due to good policy and good institution. Quick market liberalization and immediate global integration was not emphasized, but rather, the quality of economic policies and institutions were held more important. Botswana success was tied to its policy of managed openness and of effective use of imported resources. Integration and development stemmed from rational and sensible policy, not one that was quick to fix the problem in the present. This example illustrates the necessity of refocusing the argument, therefore, from one of which policy to how to effectively enact these policies given the quality of economic policies and institutions, which can be defined as governance (Hansohm, 2002). Poor governance within countries is usually characterized by: unaccountable governments, weak civil societies, low levels of freedom and civil liberties, weak enforcement of property rights, and limited role for the rule of law, low levels of cooperation between the public and private sectors, and sets of economic policies not based on systematic application of economic analysis (Hansohm, 2002).

Without capacity to sustain development projects, any initiative would fail. Good governance plays a critical role in the creation of capable states with the capacity to lead development efforts. “It entails the existence of efficient and accountable institutions – political, judicial, administrative, economic, corporate – and entrenched rules that promote development, protect human rights, respect the rule of law, demand a professional and ethical bureaucracy, and ensure that people are free to participate in, and be heard on, decisions that effect their lives” (Hope, 2008).

Governance, in terms of the policies and institutions cannot be functional if they are insecure and lack capacity. The states that are trying to integrate into the global economy suffer for their own internal insecurities. In particular, there are three areas of non-traditional or “human” securities that Africa currently faces: health, political and economic. The three areas of human insecurities that Africa is experiencing are detrimental to its development, politically and economically. The first one, health, is often viewed separate of traditional definitions of security, which included only military power, competence, and deterrence (Burgos 4/13/09). It is this trifecta of insecurities that needs to be addressed simultaneously in order for Africa to further develop.

Currently, the African Union is working on several initiatives from within the active member states that will address the development concerns. In contrast to the failures of the Lagos Plan, the New Partnership for Africa’s Development (NEPAD) provides an overarching, unified vision and policy framework for accelerating economic cooperation and integration among African countries. In addition, one of the main aspects that separates it from Africa-wide initiatives for African development such as the Lagos Plan is that it emphasizes and recognizes the necessity of democracy and governance. The three insecurities listed earlier are clearly stated in NEPAD’s overarching goals:
- Promoting and protecting democracy and human rights in their respective countries
and regions, and by developing clear standards of accountability, transparency and
participatory governance at the national and sub-national levels;
- Restoring and maintaining macroeconomic stability, especially by developing
appropriate standards and targets for fiscal and monetary policies, and introducing appropriate institutional framework to achieve these standards;
- Revitalizing and extend the provision of educational, technical training and health
services, with high priority given to tackling HIV/AIDS, malaria and other communicable diseases;
- Building the capacity of states in Africa to set and enforce the legal framework, as
well as maintaining law and order.

The immediate advantage of NEPAD is that it is rooted directly in African democracies as a regional institution and will take existing institutions and better them. NEPAD’s framework recognizes the salient importance of good governance for achieving sustainable development. This framework of developing from within the continent, endogenously, has shown to be much more effective than having an external actor come in with his own interests trying to promote development. This specific plan lends itself to accountability and responsibility on the part of the countries themselves. “For the first time in post-independence Africa, the African leaders themselves are pointing to the shortcomings of the institutional structure over which they preside directly or have much say” (Hope, 2008). Because of its organic roots, NEPAD has been endorsed and supported by the international community, including the G8 countries and multilateral and bilateral organizations such as the World Bank, the African Development Bank and the International Monetary Fund.

This new partnership will require countries to yield sovereignty to a supranational regional body, the AU. More specifically, African leaders have agreed to subject their countries to peer review through the use of the African Peer Review Mechanism (APRM). This is one of the first objective measures in something unique as this peer review. The APRM will cover issues, codes, and standards pertaining to governance and sustainable development (Hope, 2008). Together, APRM and NEPAD have the potential to provide numerous benefits for African development by providing a framework and mechanism for measuring, monitoring and facilitating progress toward good governance and sustainable development.

In conclusion, while regional integration may be an obvious solution to Africa’s deficits, it is only feasible through good domestic governance. And, good governance is predicated on stable and effective institutions and policy. The NEPAD initiative is Africa’s best option because it is the most comprehensive regional proposal grown from the member states that integrates all factors of security, macroeconomic stability and civil society.

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Works Cited

Akyus, Yilmaz, and Charles Gore. 2001. “African Economic Development in a Comparative
Prespective.” Cambridge Journal of Economics 25:265-88.

Hansohm, Dirk. “Economic Policy Research, Governance, and Economic Development: The
Case of Namibia.” Better Governance and Public Policy. Ed. Dele Olowu and Soumana
Sako. Bloomfield, CT: Kumarian Press, 2002. 195-213.

Hope, Kempe Ronald, Sr. “Poverty, Livelihoods, and Governance in Africa: Fulfilling the
Development Promise.” New York: Palgrave Macmillan, 2008.

Kanbur, Ravi. “The New Partnership for Africa’s Development (NEPAD): An Initial
Commentary.” Cornell University, 2001.

Qobo, Mzukisi. “The challenges of regional integration in Africa in the context of globalisation
and the prospects for a United States of Africa.” Institute of Security Studies, 2007.

Stiglitz, Joseph E. “Globalism’s Disconents.” The Globalization Reader. Ed. Frank J Lechner
and John Boli. Oxford: Blackwell Publishing, 2008. 208-215.

Tagged as Africa, African Union, Development, Economy, Global Studies, Globalization, Governance, NEPAD, Security, Stability + Categorized as Portfolio, Writing, Academic Papers