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The
African state must be back in the saddle
The LDCs, the majority
of which are African, may find resonance in recent calls emanating from
the continent for the state to play a central strategic part in economic
development.
Cornelius Adedze
IN its 2011 Economic
Report on Africa, titled Governing Development in Africa: The Role of
the State in Economic Transformation, the United Nations Economic Commission
for Africa (ECA) has joined the ranks of those calling for a greater
role for the state in Africa's development.
Launched during the
4th Joint Annual Meeting of the African Union (AU) Conference of Ministers
of Economy and Finance and ECA Conference of African Ministers of Finance,
Planning and Economic Development in Addis Ababa, Ethiopia from 28-29
March, the report makes the case for the return of the developmental
state in Africa and advocates state leadership in the transformation
of Africa's economies. The report says that for Africa to overcome its 'inherent development challenges',
it has to have 'a comprehensive development framework that steers social
and economic policies to work in a complementary manner.'
Africa's earlier attempts to make the state the main promoter
of development were cut short by the intervention of the international
financial institutions under the guise of the Washington Consensus,
which, through structural adjustment programmes, called for the withdrawal
of state participation in development. The state, according to the Washington
Consensus mantra, had no business being in business, and therefore privatisation
of even social services became the cornerstone of the development agenda
of African countries. Enter the global economic crisis and then even
the developed countries with their stimulus packages became apostles
of the developmental state!
Abdoulie Janneh, UN
Under-Secretary-General and Executive Secretary of ECA, in his opening
remarks to the experts session of the Addis Ababa meeting, did not mince
his words when he suggested the need for 'a renewed discussion of the
nuances of the dynamics of the relationship between an effective, developmental
state and other stakeholders, such as the private sector and civil society
organisations. It also points to the need for clear visions of development
paths and coherent, consistent and coordinated planning frameworks.'
Ethiopian Prime Minister
Meles Zenawi in his address also agreed that 'the debate on a new development
paradigm centred on the concept of a developmental state is welcome
and long overdue' for Africa as it is obvious that the neoliberal paradigm
foisted on Africa, which limited the
role of the state in development, has failed. For him, 'the neoliberal
paradigm has got Africa's development wrong both in terms of understanding
the source of the underlying problem and the solution it prescribes',
hence the failure so far by Africa to develop.
Economic transformation
The message was also
not lost on the ministers at Addis Ababa, who in their draft ministerial statement acknowledged
that since 'market mechanisms alone are not sufficient for rapid economic
transformation', there is the need to 'rethink the role of the state
in Africa's economic transformation'.
Earlier 'alternative government-led' initiatives may also have failed
but efforts at the 'characterisation of an effective developmental state
in the African context and based on an understanding of country-specific
political, economic, social, cultural and environmental realities' could
help in this regard.
They concluded, just
like ECA's Janneh, that: 'The governance and management of development
in Africa would need to be informed by lessons on successful state intervention
from other parts of the world as well as a clear understanding of its
limitations given the pitfalls of the past.'
African countries
in a return to the developmental state will not be doing anything new.
Apart from the example of Western economies' stimulus package response
to the global crisis, the developed countries have used the developmental
state model to get to where they are now. From the UK
and the US to France, Germany,
Japan and the current
giants like China,
India, South Korea
and Brazil,
the developmental state was the main driver of their development.
Africa's economic prospects are said to be favourable, with
an expected growth rate of 5% in 2011. This is dependent on agriculture
and commodities but all these are cyclical, hence the need for the developmental
state that will ensure a comprehensive development plan that involves
transformation of the economy into an industrial, value-addition one.
A greater involvement
of the state is needed in such matters as the taxation system, the provision
of essential services like good transport systems and reliable energy
supply, good education and health systems which accompany development.
The state must also get into strategic industries that will pave the
way for industrialisation as envisaged in the early post-independence
era.
Taking the lead
Affirming these measures
at one of the sessions of the joint AU/ECA experts meeting were Emmanuel
Nnadozie and Rene Kouassi, respectively Director of Economic Development
and NEPAD Division at ECA, and Director of Economic Affairs at the AU
Commission, who explained that in the context of scarce investment resources
that characterises most African economies, sustained economic growth
would be impossible without the state taking the lead, or at least playing
a major role.
They used the recent
cases in Europe, where the state ran to the rescue of countries such
as Greece, Ireland
and Portugal, as illustrations
to justify the desire to see the state get better involved in the running
of African economies.
The meaning and role
of a developmental state can be better appreciated by drawing lessons
from the Asian countries which based their development strategies on
infrastructural development, mobilising savings for investment in education,
health, agricultural diversification, science, information technology
and communication, research and development, among others.
The developmental
state as suggested by the participants at the Addis
Ababa meeting should be one that looks 'to restructure
its bureaucratic incentives away from rent-seeking towards facilitative,
pro-growth and pro-poor allocation of resources' and ensures a 'sustained
diversification of the production and export base' of the economy.
To achieve these ends
will mean, among others, the adoption of development strategies and
industrial policies for structural transformation, the strengthening
of development planning institutions, public finance governance and
long-term development planning and strategy-setting.
The agenda of the
developmental state is not about outright nationalisation of industries
but state intervention in strategic industries that will transform their
economies. What the developed countries did to arrive at where they
are today and what their central governments are doing in the name of
stimulus packages to reignite their economies is but an attempt to reinvent
the developmental state. Africa has
been more or less in a 'permanent crisis' for over three decades and
is therefore entitled to return to the developmental state agenda if
it is to resolve its developmental challenges.
u
Cornelius Adedze
is Editor of African Agenda, from which this article is reproduced (Vol.
14, No. 1, 2011). African Agenda is published by Third World Network
Africa, the Africa secretariat of TWN.
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Africa and the developmental state
Kwesi W Obeng
FIERCE contestations
over the African state have weakened rather than strengthened
states on the continent to perform their functions, according
to Omano Edigheji from the Human Sciences Research Centre based
in Pretoria, South Africa.
In his presentation
on 'The Global Economic Crisis and the Revival of the State:
Implications for the State in Africa', Edigheji's call for a 'democratic
developmental state' and a developmentalist coalition to drive
the state agenda sparked an animated debate during a 21-23 March
seminar on the global financial crisis and Africa.
The African
state has to be both developmental and democratic. The neoliberal
agenda, he argued, had very little democracy. If anything, it
was very supportive of autocracy. In effect, the dominant neoliberal
regime supported authoritarianism.
Edigheji said
developed countries' responses to the 2008 crisis affirmed that
declarations of the death of the nation-state were premature and
misguided. Nationalisation is back on the agenda with the state
acquisition of auto companies and nationalisation of private banks
in the United States and Europe.
The global financial
crisis has shattered the tired argument that the market is self-regulatory.
It also unveiled one of the shameless faces of the dominant economic
regimes as it prescribes socialism for the private sector and
capitalism for the poor and working class.
This solution
to the crisis offers an important juncture for intervention, the
need for the developmental state, Edigheji argued. He defined
the developmental state as a state that acts purposefully and
authoritatively for the social good. In effect, the developmental
state is a state that possesses 'developmentalist ideology'.
He identified
some of the key organisational and technical attributes of the
developmental state as meritocratic recruitment to the public
service, good rewards and central planning agencies. The state's
relationship with non-state actors constitutes the second group
of attributes of the developmental state. With more than half
of all Singaporeans living in state housing, for example, it was
wrong, he argued, to say that developmental states only promote
industrialisation. Developmentalism is a central part of a developmental
state.
The type of
developmental state in the last century was blind to the environmental
question. However, the 21st-century developmental state has to
be sensitive to the climate and environmental question.
The developmental
state must build transformative and competent institutions - place
emphasis on planning; revive or establish marketing boards; forge
a developmentalist coalition (Edigheji did not define the social
force that will drive this coalition) and good development governance
(not good governance).
The framework
must also include industrial policy, greening developmental state
and enhancement of human capabilities. Edigheji said building
that developmentalist coalition and engendering the 'democratic
developmental state' are some issues for further research.
The seminar was hosted by Third World Network
Africa in Accra,
Ghana.
- African Agenda
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*Third World Resurgence No. 249, May 2011,
pp 25-26
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