International Reports

The Uncertain Future of the G8 Strategy on the Development of Africa

At their summit meeting at Gleneagles in July 2005,the G8 heads of state resolved to enhance their efforts to consolidate Africa. The reason was that, three years after their Kananaskis meeting, their former strategy had obviously failed to reach the United Nations’ Millennium Development Goals (MDG) in sub-Saharan Africa. In concrete terms, it was decided at Gleneagles not only to increase the funding of the region but also to extend cooperation to partners such as the African Union (AU). There are four questions that arise in this context: Will a strategy of massive external funding sustainably promote economic development and the alleviation of poverty in Africa? Are partner institutions such as the AU, the NEPAD, the African Development Bank (ADB), and regional organizations capable of implementing such a strategy? Will the resultant changes move in the desired direction? Are the donor countries capable of providing the resources they promised? The figure that dominates the report of the Commission for Africa (CFA), which handled the preparation of the conference, as well as the UN report on MDG compliance is that of Jeffrey Sachs. Mr Sachs believes that the African poverty trap is caused by a low savings-to-income ratio in combination with a high population growth rate or, in other words, by stagnating capital accumulation, which prevents a self-supporting, dynamic development of the economy. Now, 40 percent of the funds are earmarked for satisfying fundamental needs and alleviating poverty. Subsequent funding is to be secured by future economic growth, which will be financed by the remaining 60 percent of the funds. At the end of the day, however, there is nothing to guarantee that growth will be boosted by yet another massive injection of resources, a ‘big push’. Be that as it may, it may well be doubted whether the optimism radiated by the CFA report is based on fact. Not only the massive increase in funds but also the allocation modalities suggested by the CFA are problematical. The EU, the World Bank, and other donors propose changing to budget and programme funding because, as they say, it is more efficient and obliges governments to take a hand. However, budget aid creates new dependencies, stultifies initiatives, and shifts the focus of foreign aid once again towards government intervention. The strategy proposed suggests that African societies are less complex than they really are and disregards their fundamental structural weaknesses. There are no contractual agreements on good governance and political conditions; instead, everything is based on mutual respect and solidarity. To put it in nutshell: Reform proposals are not evaluated by the donors but agreed between the donors and the NEPAD. The African strategy of the G8 is upheld by three pillars: security and peace, domestic reforms, and economic development. Everything depends on the success or failure of the AU and its economic programme, the NEPAD. Cooperation with these institutions is one of the key objectives of the strategy adopted at Gleneagles. Based on the experience of previous years, the promoters of the NEPAD created the Peace and Security Council (PSC) in 2002 to solve intra-African conflicts. Although the PSC reports to the AU General Assembly and its capacities are not nearly adequate for its mission, many member states feel that their own sovereignty is threatened by it. This being so, it is questionable whether the institution will be really effective in preventing, managing, and solving conflicts. Even the NEPAD’s chances are not very good. Launched by the South African Thabo Mbekiunder the name of Millennium African Renaissance Plan, it owes its existence to the visions of African politicians and the designs of international financiers. Consequently, its procedures and decision-making processes are highly complex, and the question of what the NEPAD really is remains to be answered. One of the NEPAD’s core elements is the African Peer Review Mechanism (APRM), a review process based on questionnaires. However, the APRM is open to many states, including some with considerable deficits. Thus, grave defects were discovered in elections recently held in a number of countries that are regarded as major supporters of the APRM. There view itself is likely to take years, and it is questionable whether its results will be objective. The APRM’s problems are evident, and it is not certain whether the G8 countries will allow themselves to be influenced by its results. At the moment, there are 130 organisations in Africa that serve to promote cooperation among governments as well as supra regional integration. Often badly equipped, they are carbon copies of non-African organisations. Even the work of the seven regional organisations recognized by the AU as ‘pillars’ shows many deficits. At the same time, neither the AU nor the NEPAD have any option of influencing matters so as to enhance the efficiency of these organizations. With regard to the implementation of projects, the NEPAD depends on regional economic communities (RECs). However, none of the projects proposed has been realized so far, a fact that casts some doubt on the functionality of the RECs and illustrates the difficulties encountered by the region in arriving at a joint course of action. In addition, the initiative to establish the NEPAD proves the importance of both South Africa and Nigeria. The NEPAD is of particular significance for South Africa, which became the tutelary power in the region after the fall of the apartheid regime. However, Nigeria is prominent as well, and its president, Mr Obasanjo, was not content to leave the initiative for reform to South Africa alone. Lastly, there is the question of what the interests of the industrialized nations were in supporting the Gleneagles decision to pursue the structural changes in international development cooperation initiated by the MDG, and to replace the old, discredited form of cooperation by a new, visionary concept. Enhancing the multilateral nature of cooperation with sub-Saharan Africa is mainly supported by the US, the UK, and France. After the end of the East-West conflict, the US were particularly anxious to resolve conflicts and maintain stability in the region. Of course, it was motivated in part by its own interests, particularly with regard to the extraction of oil and mineral resources. While France was motivated by its growing rivalry with the US in addition to its own traditionalties to the region, the UK was concerned about maintaining its reputation and influence within the Commonwealth. The interests of the remaining G8 states, such as Germany and Italy, are limited. The African strategy developed by the EU after the Gleneagles summit is largely congruent with that of the G8 states. Even so, the Europeans set some high-lights of their own, such as the European Security Doctrine adopted late in 2003, which addresses the threat presented to Europe by diseases, violent conflicts, migration, and problems related to the supply of energy and/or raw materials that are rooted in Africa. The EU advocates comprehensive partnership between the African and European continents as well as improved coordination among the European donors to enhance the efficiency of their cooperation. Another objective is to reformulate the rules governing trade relations, as the current system of unilateral trade preferences contravenes the regulations of the WTO. It appears unlikely that the objectives set for 2006 will actually be reached because current growth rates fall markedly short of the targets set at Kananaskis. New financing instruments, such as a tax on air tickets or a prefunded international finance facility (IFF), appear hardly promising. The international capital transfer or Tobin tax is the only alternative with a modest chance of success. The only approach that is likely to effect a genuine increase in international development aid is to stock up national development-aid budgets – a move that is hardly likely to meet with the approval of countries like Germany or France. Despite all problems and disagreements about the right course to take, the EU cannot evade the challenges posed by Africa. Mutual relations are too deeply rooted in geographical proximity as well as in history. There is no doubt that Africa needs external aid more than ever before in view of its many ailments. What is more, there are not only many countries where opportunities for democratic reforms have been missed, but also many others where progress has actually been made. For this reason, individualized programmes defined on a case-by-case basis are more effective than general initiatives at a higher level. Europeans would be well advised to continue their partnership and decentralization strategy carefully, emphatically, and as unbureaucratically as possible at the micro-level without losing sight of developments at the macro-level.