Closing Statement of the Co-Chaipersons

Excellencies Heads of State, Honorable Ministers and heads of Agencies, distinguished participants, ladies and gentlemen:

It is my privilege to present this concluding report of the Plenary on behalf of the Co-Chairmen of the GCA. Speaking on behalf of all participants, I want to express once more appreciation and congratulations to the Dutch Government for hosting this conference, and for its warm hospitality. Like others, I have also been impressed by the high-level of attendance, from both Africa and donor countries and institutions, and by the active participation of all delegations, including those representing civil society.

Our two days of productive discussions have been conducted with the candor and openness which has become the mark of GCA meetings. They have also been conducted with the aim of improving understanding of the issues which have to be addressed, and of finding innovative ways of moving forward. We, the Co-Chairmen, believe that as a result a convergence of views has been reached on a number of important issues, as well as on actions which have to be taken by us all. Our original consensus reached in 1990 was reaffirmed and expanded to include additional elements.

President Masire, in his extraordinarily thoughtful and wide-ranging opening discussion of the status of political, economic and social development in Sub-Saharan Africa, made three basic points:

1. When we met here five years ago, there was a deep concern about the region's prospects because throughout the 1980's most African countries had recorded dismal economic performance, many have faced political setbacks and, as a result, social order and the welfare of the people were threatened.

2. Therefore Maastricht I proposed a series of actions which it was believed would reverse the negative trends of the past, put the region on the path to sustainable development, and enable Africa to face the challenges posed and take the opportunities provided by the rapidly changing world order.

3. While there have been some positive developments in the past five years --- new bright lights of success on the African continent which inspire and encourage us all --- the economic and social climate in Africa continues to cause serious concern. Positive change has been slow and insufficiently deep and broad. Too many people on the continent continue to live in misery and poverty, and basic human and political rights continue to be denied in all too many instances.

President Masire concluded therefore that we must chart a new course for the future. To help chart that course six keynote speakers were called on: two to address economic issues; two to comment on political problems; and two to focus on Africa's relations with the world. From their remarks, and from the Plenary discussion which those remarks generated, we believe we can draw these conclusions:

1. Despite the welcome end to major civil wars in Ethiopia, Mozambique, and Angola, Africa remains vulnerable to the threat of catastrophic internal conflicts exacerbated by unresolved ethnic religious and political differences of the kind we see in Somalia, Sudan, Rwanda, Burundi and Liberia. Nigeria, the largest African nation, is experiencing alarming deterioration of governance and threatens to destabilize the region at enormous cost. It is therefore imperative that Africa develops its own capacity to address such conflicts, with a primary emphasis on the prevention of violence, while addressing the root causes of conflict. The international community can make a contribution by providing financial support and logistical assistance to the conflict management and post-conflict reconstruction and reconciliation mechanisms that have been set up within the framework of the OAU. The lack of such support limited the ability of the OAU to respond effectively to the disasters in Rwanda and Burundi.

2. At the same time, Africa faces problems of governance which are also far more severe than those of other regions. Good governance lies at the heart of the development process. But in Africa, popular participation, transparency in government operations, and accountability remain insufficient. Denial of freedom of expression still persists. Nonetheless, the broad commitment of African delegations to the nurturing and enhancement of democracy and governance was striking, as was the condemnation of excessive militarization and military regimes as threats to democracy and national and regional security. Increased acceptance of the need to reduce military expenditures and re-direct savings to productive and social sectors was also heartening.

3. Economic and social performance has varied across the region but, on average, has been far below what had been expected, far below what has been achieved in Latin America and Asia, and far below what should have been achieved given Africa's potential. The number of people living below the poverty line has increased to nearly 50%, and per capita growth rates of food production and gross domestic product have been negative.

Some have sought to explain the low rates of economic growth and the unsatisfactory rates of social advance by pointing to external factors. They stress falling commodity prices, adverse terms of trade, and protectionism in export markets. But each of these problems has been faced and overcome by other developing countries. Others explain the differences by saying that external financial flows to Africa have been inadequate. However, financial assistance to Africa --- both per capita and as a percentage of GDP --- has been higher than to any other area in the world. While it was heartening to hear several donor representatives pledge to maintain current aid levels, it is highly unlikely that development assistance will rise by any substantial amount in future years. Aid dependency, not inadequate external financial support, is the problem. The one exception to this statement is debt relief, about which more will be said later.

The two days of discussion on Africa's economic, political and social problems affirmed that the primary responsibility for solutions to African problems lies with the leaders and the people of each African country. It is they who must set the objectives and lay out the plans to achieve them. It is they who must accept ownership of the economic programs. Satisfactory social advance can not be realized with less than at least 5% growth per annum in GDP (2 percent growth per capita) and that must be accompanied by specific actions to reduce the number of people living in poverty. Because agriculture is still the mainstay of most African economies, this will require doubling the agricultural growth rate to at least 4%. Achieving such growth rates will necessitate large increases in domestic savings, very likely a doubling from approximately 14% of GDP to roughly 25%. Action must also begin now to develop the legal, regulatory and institutional frameworks to encourage both domestic and foreign direct investment, which at present is minimal.

We also recognized that the rapid globalization of international trading and financial systems has led to the emergence of a new world economic order from which Africa is virtually excluded: its share of world trade had declined to 1% in 1990, less than half of what it was 20 years earlier. To counter these trends, Africa must become more competitive, diversify its exports (manufactured goods are now no more than 5% of total exports), and push much harder and more systematically to integrate its regional and sub-regional markets. It is reassuring that Africans now recognize the need to rationalize the more than 200 regional organizations now trying to address these problems.

None of the programs outlined above can be successful in the long run unless the fertility rate, now 6.4, and the population growth rate of over 3.2 % --- the highest rate in the world --- are lowered far more rapidly than now appears likely.

We want to say a special word about debt relief. Although much of the foreign debt of African low-income countries is not now being serviced, or is serviced with special support --- and therefore is not a cash payment burden --- the debt overhang reduces the credit worthiness of African countries and is a penalty to their development. Therefore, debt relief is justified. The World Bank and the IMF, with the Paris Club, should be responsible for working with each low-income country to establish a comprehensive "Exit Strategy" which would adjust its debt to levels which can be serviced over the long term: debt service payments should not exceed 20% of forecasted export earnings. Decisions to this end should be taken in 1996. For too many years effective action has been postponed.

With the exception of debt adjustment, few of the actions that have been proposed are dependent on increased levels of foreign assistance. But all require forceful actions by national leaders supported by their people. I am reminded of what Deng Tiau Ping told me 15 years ago after we had negotiated the re-entry of the People's Republic of China into the World Bank. He said: "... we are poor, we are inexperienced, we make mistakes; we need your help, we need your technical assistance and we need your financial assistance". But then he shook his finger in my face and said: "But whether we get it or not we will achieve our objectives". He had just said his objective was to quadruple China's GDP from 1980 to the year 2000. People thought that impossible. But it is now expected that China will exceed that objective: it will quadruple per capita income in the 20-year period. During that time, China's per capita income will rise 400%, while Africa's will fall approximately 20%. All of us would hope that Africa, while seeking to emulate China's economic advance, would go far beyond it in providing liberty to its people. For this Africa does not have to look beyond its borders. There are African societies that have been making great progress in that direction.

If Africa will accept responsibility for its own destiny, it too can make remarkable progress in the next 20 years. It can begin by establishing in each country targets for the key elements of broad-based growth, sustained development, and poverty reduction. These can then be monitored and appropriate political, economic, and social sector progress reports prepared. The GCA could play a catalytic role between African countries and the FAO, WHO, UNDP, UNICEF, the IMF and the World Bank in the establishment of targets and a monitoring system.

In sum, the conference has made clear that Africa's agenda for the next 5 years --- and for many years beyond --- must focus on:

	The prevention of destabilizing internal violence and the establishment of effective conflict management mechanisms.
	Improvements in governance, emphasizing accountability, transparency and inclusion of civil society in the policy-making process.
	The full empowerment and productive employment of women, and recognition of the crucial role they play in the political, economic and social development of their countries.
	Raising the rates of economic growth, securing greater equity in its distribution, and thus translating that growth into poverty reduction and social advance.
	Regional economic integration as an essential element in strategies to achieve competitiveness in the new global economic order.

With that as the Agenda for both Africa and the GCA, the meeting has endorsed the continuation of the GCA for another 5 years.

The Co-Chairmen of the GCA intend to discuss a plan of action to support the outcome of this Plenary Conference at a meeting they will hold early next year. We will also decide on the agenda of the next meeting of the Advisory Committee, which is scheduled to take place in Ouagadougou, November 1996. The agenda will reflect the priorities set at this Plenary. From now on, the Advisory Committee will be expanded into a GCA Policy Forum, in which all African countries committed to democratic policy reforms and sustainable human development can participate, together with the partner countries and institutions which are committed to supporting them in these reforms. We will also work out ways and means to engage the civil society, in particular the African NGOs, in our work.