|
Reflections
on Africa Competitiveness Report 2013
Ghelawdewos Araia, PhD
December
27, 2013
The Africa Competitiveness Report 2013,
put out by the World Economic Forum (WE Forum), is
a comprehensive analysis and critique of the
overall development status of thirty-eight African
countries. It has also recommendations on how
Africa can uplift itself and successfully become
part of the global economy. Based on the World
Bank and the African Development Bank (AfDB) data
base and recommendations, the Report makes a
thorough assessment of African countries’
economic parameters, ranging from their use of
information technology to regional integration in
the context of other successful countries outside
Africa, as well as developed nations that could
become major foreign direct investment (FDI)
potentials.
There
is no doubt that the Report could serve as a guide
to African policymakers especially if the latter
meaningfully address the many recommendations that
the Report has craftily assembled. However,
African policy makers should not dogmatically
embrace the WE Forum Africa Competitiveness Report
2013 as if it is the only blue print for
development. Africans should meticulously sift
through the corpus of the Report and adopt aspects
of the Report that are relevant to their specific
realities on the ground. They should also
carefully assess the heavy emphasis of the Report
on the private sector although, to its credit, the
Report also underscores the public-private
partnership (PPP). Africans should also critically
examine the old fashioned yardstick known as GDP
as opposed to human development index (HDI), and
more importantly they should seriously consider
equitable distribution of wealth while they strive
to garner economic growth and development.
At
the very outset, the Report discusses a “policy
vision that can help Africa, connect its markets
and communities through increased regional
integration,” but with respect to the
realization of the latter the WE Forum believes
that “a vibrant private sector – as the
producer of tradable goods and services – will
play a key role.” It is indisputable that the
private sector, or capitalism as a whole as
testified in its long history, contributes to
economic growth and development but from this
premise we should not necessarily make inference
that the private sector alone is the engine of
development while the state (more specifically the
government) or public sector stand by idly or as
the Report puts it, “Governments can lay the
foundations for the sound business climate
required for firms to prosper, and can provide the
legal and regulatory frameworks required for
regional integration.”
The
Report seems to view governments as facilitators
and not as key players in economic growth and
development, and I believe this is one of the
shortcomings of the Report. Throughout history, in
one form or another, governments or states in the
broader sense, have played a major role in
development not only as facilitators and
regulators but also as initiators of industrial
policies for transformation in their respective
countries. These types of nations are known as
developmental states (a concept that is not
mentioned in the Report) and are best exemplified
by countries like Japan, South Korea, Taiwan,
China, and Sweden etc.
I
have fully addressed the role of the developmental
state (DS) in my book entitled ETHIOPIA:
Democracy, Devolution of Power, and The
Developmental State. Chapter 13 of the book is
entirely devoted to what Ethiopia can learn from
other DSs such as Japan, the High Performing Asian
Economies, China, and other emerging economies
such as Brazil, India, Botswana, and Mauritius.
However, I have also discussed the role of
education in development as well as good
governance in the context of democratic
experiments in the United States and Europe and
what Ethiopia can learn from these democratic
nations. Democracy might not be directly linked to
development but good governance, as we shall see
later, would play a decisive role in the overall
developmental and transformational measures
undertaken by countries.
The
Report, which runs into some 221 pages, opens with
optimism by stating, “Africa is at an auspicious
moment in history, when the success of past
decades and an increasingly favorable economic
outlook combine to give the continent an
unprecedented opportunity to boost investments and
spur regional integration to end poverty within a
generation.” The same Report concludes with
optimism as well: “The present time is
fortuitous for Africa. The continent is enjoying
solid growth, and much of international attention
is focused on Africa as an investment destination,
with a specific emphasis on the continent’s
infrastructure. Unfortunately, this growth is
uneven and highly reliant on natural resources,
with a number of resource-rich countries enjoying
very strong growth – in some cases over 10
percent – and other countries not doing well.”
Since
some countries are not doing well in Africa and
the continent as a whole is not fully integrated
into the global economy, it is important to figure
out the problems and obstacles that Africa has
encountered, and once the latter are clearly
identified African countries should be able to
come up with sound polices and solutions. Other
major obstacle that Africa countenanced was the
Cold War but after the latter subsided following
the end of the Soviet Union, or more specifically
after 1991 when some African countries began to
emerge as “more hopeful” (to use the
Economist’s phrase) in the development march,
Africa seemed to traverse on a bright path.
However,
even when some African countries began to emerge
in the post-Cold War era, both internal
impediments in the form of corruption and bad
governance, and external factors such as
indebtedness to foreign nations and influences to
unviable and wrong economic polices such as the
structural adjustment program (SAP), have
contributed to the lethargic economic performance
of Africa.
The
inability of African countries to emerge as viable
economies was addressed three decades ago by
Africans themselves, and their reaction to the
problem resulted in the formation of the Lagos
Plan of Action (LPA), a blue print for African
development that was not implemented; and some
four and half decades ago by some scholars such as
Andrew M. Kamarck, who served as director of the
Economics Department of the World Bank and who
also lectured at the School of Advanced
International Studies of the Johns Hopkins
University.
Analyzing
African economies in the context of private
companies investments, Kamarck had the following
to say: “The immediate effect of the chartered
companies’ early opening up of Africa were not
all positive. In the attempt to make a profit or
to get their capital back, some of the companies
and concessionaries indulged in activities that
resembled plundering of the territory under their
control more than it did economic development; the
forced labor exacted from the Africans to collect
and transport rubber, ivory, and timber or
construct roads and railways prevented the
Africans from producing for themselves and killed
off large numbers from disease, overwork, and
famine.”1
Kamarck
did not (and he could not at the time) blame
Africans for the underdevelopment of the Continent
during the colonial and immediate post-colonial
periods. It is abundantly clear that the colonial
legacy had an imprint on the staggering African
economies long after the colonizers departed but
the latter continued to exploit African resources
indirectly even when Africans asserted their
self-determination and independence.
The
WE Forum Report 2013 does not address the
intricate colonial and Cold War legacies, perhaps
conjecturing that Africa is now on its own and
there aren’t exogenous forces that influence
and/or manipulate African policies. This
conceptual framework, however, is fallacious and
to be sure much of Africa is still under the
influence of the Commonwealth and the Francophone
post-colonial networks in particular and under
Western influence in general, which for the most
part exhibit hegemonic pressures.
However, blaming external forces without
critically examining endogenous factors is also
equally fallacious, because it is not just the
former colonizers that are responsible for
Africa’s backwardness; African leaders from the
1960s to the 1990s and beyond are to be blamed as
well.
Unfortunately
three decades after Kamarck’ incisive analysis
of African economies and even after the World Bank
recognized the failure of SAP and its renewed
emphasis on the significance of institutions and
the role of the state in the economy, the Economic
Commission for Africa (ECA) argued, “What Africa
needs is a “second generation” of reforms
which would focus on speeding up trade
liberalization to boost the efficiency and
competitiveness of domestic producers, tackle
public enterprise reform, redefine the role of
government away from direct involvement in
production and toward the provision of essential
public services, and promote a viable and vibrant
private sector.”2
Apparently
Allassaine Quattara, the then IMF official and the
current president of Cộte d’ Ivoire
advanced the argument in favor of a “viable and
vibrant private sector”. Interestingly,
Quattara’s paper delivered at the IMF Seminar
sponsored by the Swiss Coalition of Development
Organizations, at Berne, is entitled “Putting
Africa on a Sustainable, High Quality Growth
Path.” Allassaine Quattara is now in a much
better position to assess Africa’s growth and
also whether the continent has indeed made a
stride on sustainable development strategies or
not.
Moreover,
the ECA working paper series of 1997 states,
“the new economic international order is
expected to increase global benefits [but] weak
structural economic situation and the scarcity of
applicable institutional and human resources
capacities in many African countries could be
major impediments for these countries to take
advantage of these new trade opportunities.”3
This ECA assessment is correct but it does
not cogently appraise why Africa has encountered
impediments and how this new global order could be
beneficial to the continent. But, the ECA at least
enumerates the constraints that African countries
face: weak technological capacity; paucity of
long-term finance; expensive trade credit and
pre-shipment finance; deficiencies in the physical
infrastructure; inadequate legal and regulatory
frameworks; and absence of a coherent strategy for
export development.4
What
the ECA working paper series addressed on African
economies and development strategies is now
repeated in a more elaborate way by he WE Forum
but the latter’s Report is focused on “the
potential of regional integration as a stepping
stone for building economies of scale, increasing
competition, and fostering economic
diversification.” It is a well-known fact that
regional integration would serve as a vehicle for
a stronger and competitive economy by
circumventing the current “fragmented regional
markets” across the board in the continent, and
it is for this apparent reason that Africans have
created regional communities long before the WE
Forum Report 2013 was drafted.
Some
of the regional African communities are Economic
Community of West African States (ECOWAS) that was
established in 1975 and has sixteen member states;
Southern African Development Community (SADC)
founded by the Lusaka declaration in 1980; the
East African Common Market, whose precursor was
the East African Community (EAC); Common Market
for Eastern and Southern Africa (COMESA), whose
members include from both SADC and EAC and some
from Inter-Governmental Agency for Development (IGAD),
which essentially comprises the Horn of Africa
countries like Djibouti, Ethiopia, Somalia, Sudan
and some from the EAC like Kenya and Uganda;
COMESA, in turn, would accommodate all of the
above including northern African countries like
Egypt and Libya except ECOWAS.
Of
all the above regional African communities the
relatively most successful are ECOWAS and SADC.
ECOWAS has departments such as trade, customs,
industry, and free movement presided over by a
commissioner, and a director who runs each
department. SADC initiated a free trade area and
joined COMESA in 2008 and the EAC, thus creating
the largest African free trade zone, with 26
countries and estimated $624 billion in GDP.
The
new EAC, now officially know as East African
Common Market (EACM) includes Kenya, Uganda,
Tanzania (former members of EAC) and Rwanda and
Burundi. On July 10, 2010, the Institute of
Development and Education for Africa (IDEA) wrote
an editorial entitled “Hail The East African
Common Market” and discussed, among many other
relevant issues, the significance of the new
regional integration in terms of open borders,
common customs, common currency, and ultimately
common flag.5
All
African regional organizations were met by
formidable challenges such as weak infrastructure,
different products, tariff regimes, and different
currencies but they are on the process of
overcoming these hurdles. Of all regional
communities, the weakest is IGAD and it is mainly
due to the instability and lack of security in the
region.
The
WE Forum Report is highly emphatic on the
necessity and significance of regional integration
but it also notes the deficit in electricity and
provision of paved roads, and believes that
“Africa needs well structured networks linking
production centers and distribution hubs across
the continent to deepen regional trade and
integration.”
There
is no doubt that regional integration would
accelerate African countries economic development,
but the regional communities would become empty
associations of nations if they are not supported
and reinforced by the necessary resources and the
right policies that would enable Africa compete at
global level. The WE Forum states, “Regional
integration is not an end in itself. Efforts to
close Africa’s competitiveness – particularly
in the areas of institutions, education, skills,
and technological adoption – will be central to
African economies to build their productive
capacities.”
Once
African countries meet the necessary requirements
or prerequisites for regional integration and
ultimately integration into the global economy,
individually or in groups, they will be evaluated
on the basis of global competitiveness index (GCI)
because it is assumed that each country or a
cluster of countries could exhibit different stage
of development. In order to fully gauge a
country’s stage of development, thus, the GCI
“distinguishes three stages of development:
factor-driven, efficiency-driven, and
innovation-driven.”
If
we follow the WE Forum GCI of 2012-2013, we can
compare African countries within themselves and
with other countries outside Africa based on their
score. For instance while China’s score is 4.8
and South Asian average is 4.5, that of South
Africa and Mauritius is 4.4; that of India is 4.3
and the North African average is 3.8 and
sub-Saharan average is 3.6. In the latter group,
while Ethiopia scores the highest 3.6, Burundi
scores the lower of 2.8; in between 2.8 and 3.5
scores are Cape Verde, Uganda, Nigeria, Malawi,
Madagascar, Cộte d’Ivoire, Zimbabwe,
Burkina Faso, Mauritania, Swaziland, Lesotho,
Mozambique, Chad, Guinea, and Sierra Leone.
However,
the average score is only one variable in the GCI
and may not tell the whole story of the stage of
development. For instance, in terms of
macroeconomic stability and “better fiscal
position that results from strong resource
reserves,” while South Africa and Kenya perform
well at global level, Algeria and Nigeria also
follow suit. By African and world standard, South
Africa has become a promising successful country
and it has even become the latest addition to the
BRICS group that is, Brazil, Russia, India, China,
and South Africa; it is also part of India,
Brazil, and South Africa (IBSA). Now, the major
challenge for South Africa is not as such its GDP
growth but its fulfillment of the human
development index (HDI), a stark deficiency in the
provision of goods and services to the Black
majority of South Africans.
One
other important development strategy that the WE
Forum brought forth is what it calls ‘toward
sustainable and inclusive growth’ and the key
word I like to discuss here is
‘sustainability’. The WE Forum’s definition
of sustainability is “the set of institutions,
policies, and factors that enable all members of
society; to experience the best possible health,
participation and security; and that maximize
potential to contribute to and benefit from the
economic prosperity of the country in which they
live.”
The
WE Forum definition of sustainability is palatable
to me, but I had my own perspective on
sustainability that was discussed in my article
entitled “African Education and Sustainable
Development” (www.africanidea.org/African_education.html)
and, in turn, incorporated in my new book:
“sustainable development cannot be realized
without a multidisciplinary approach and a
multivariate analysis of the various attributes
such as ecological process, biological diversity,
human population and their needs, renewable energy
and non-renewable resources, and global
re-distributive justice etc. Sustainability
requires practical constructive engagement and the
above mentioned attributes could not be
meaningfully addressed and dealt with unless 1)
political systems exhibit commitment to enhance
citizen participation in decision-making (this
also entails accountability and transparency); 2)
economic systems generate surplus and technical
know-how on a sustained basis (by extension, this
must foster human development index – HDI); 3)
social systems provide mechanism to resolve
conflicts that may arise as a
result of development; 4) production
systems preserve the environment or the ecological
base for development; 5) technological systems
keep up with new devices that are environmentally
friendly; and 6) international systems promote
sustainable patterns of trade , finance, and
development that are deliberately geared toward
reducing, if not eliminating hunger and
poverty.”6
I
wrote the above definition of [perspective on]
sustainability ten years ago and although the WE
Forum definition is acceptable to me, it is not
broad enough in its scope to dissect the complex
parameters of growth and development, and it is
for this reason I found it important to include my
own definition, which is relatively comprehensive.
The
WE Forum Report compares sub-Saharan Africa GDP
growth of 5.7 percent average from 2012-2013 with
the GDP growth in developing Asian countries that
score 8.5 percent on average; it also compares the
intra-regional trade of Africa (12%), ASEAN (25%),
EU (65%), and NAFTA (49%). But, this is not a fair
comparison. The more developed and more connected
Europe cannot be simply compared with those
African countries at a lower stage of development
and poorly connected countries; African countries
should not be compared with the NAFTA bloc either
for the same reason I have indicated above.
However, it would be reasonable to compare
developing African countries with developing Asia,
and since the latter exhibited good connectivity
in order to enhance its intra-regional trade,
African countries must do the same in order to
boost their regional communities and intra-trade
activities.
On
the other hand, the WE Forum’s assessment of the
reasons behind poor regional integration in Africa
is correct as enumerated below:
-
Infrastructure
deficit
-
Border
corruption and multiple road blocks
-
Non
Tariff Measures (NTMs) in the form of quotas,
charges, discriminatory labeling and health
and sanitary regulations undermine trade [in]
the regions
-
The
lack of physical security when crossing border
In
order to overcome the above problems and
meaningfully implement sound and safe
intra-regional trade, African countries should
abide by the criteria of the enabling trade index
(ETI), which, in turn, comprises several
sub-indexes such as:
-
The
market access sub-index
-
The
border administration sub-index
-
The
transport and communication infrastructure
sub-index
-
The
business environment sub-index
The
sub-indices, in turn, are composed of a “number
of pillars of enabling trade, of which there are
nine in all:
-
Domestic
and foreign market access
-
Efficiency
of customs administration
-
Efficiency
of import-export procedures
-
Transparency
of border administration
-
Availability
and quality of transport infrastructure
-
Availability
and quality of transport services
-
Availability
and use of Information Communication
Technology (ICTs)
-
Regulatory
environment
-
Physical
security
The
African Development Bank (AfDB) regional
integration strategy (RIS) for 2009-2012 examines
regional infrastructure, trade, and regional
public goods and makes recommendations on how to
implement the Bank’s program. As per AfDB,
“Regional projects are complex but
transformational. For example, the Ethiopia-Kenya
power inter-connector and the
Zambia-Tanzania-Kenya inter-connector will link
the Southern Africa Power Pool and the Eastern
Africa Power Pool, resulting in a large regional
market for electricity.”
The
above AfDB recommendation is one of several other
recommendations and the regional inter-connectors
could serve as efficient and effective power pools
for the COMESA countries in particular and other
African countries in the long haul. On top of
regional market for electricity, as indicated in
Box 6 of the Report, thanks to AfDB’s
initiatives, the use of green energy in Africa is
on the rise. “Africa has more than half of the
worlds renewable energy potential: its wind,
geothermal, and hydropower potential has barely
been tapped.”
Some
examples of renewable energy mentioned in the
Report are The Grand Ingra Dam in the Democratic
Republic of the Congo, which has a potential of
100,000 megawatts (MW) of electricity; the Great
Rift Valley, which has a potential to generate
7000 MW of geothermal electric power; the
Cabeolica wind farm in Cape Verde; the Tunisian
solar thermal power that has the potential to
export 2000 of MW to Europe; the Turkana Wind
Project and the Menengai Geothermal Plant in
Kenya. Two dams that could be major sources of
electricity for regional integration that are not
mentioned in the Report are the Gilgel Gibe Dam
and the Grand Renaissance Dam of Ethiopia. Gilgel
Gibe is now complete but completion date for the
Grand Renaissance is expected to be around 2017
and when finished it is going to be the largest
dam in Africa, with 63 billion cubic meter of
reservoir, with capacity of 6000 MW and with net
generation of 15000 MWh.
The
African potential in renewable energy, including
sun, wind, electricity, and biomass is tremendous
but the continent is also blessed with strategic
minerals, and in regards to the latter I wrote an
article on the DR Congo in 1997 (when the country
was officially known as Zaire) and have argued as
follows: “Zaire is no just on of the largest
countries in Africa; it is also one of the richest
in the Continent. The country is blessed with vast
deposits of copper uranium, gold, diamonds,
platinum, chrome, uranium, cobalt, tin, silver,
zinc, manganese, tungsten, cadmium etc. 50% of
Africa’s total cobalt comes from Zaire and the
country’s hydroelectric potential is equal to
⅛ of our planet’s total hydro power.”7
With
huge untapped resources, Africa indeed is the
future continent but there is always a catch to
renewable and non-renewable resources if we
critically examine them in terms of capital,
know-how, and governance to effectively utilize
the resources and realize Africa’s
competitiveness in the global market. And because
the energy pools are capital-intensive, Ethiopia
currently uses only 8 MW in geothermal because the
country at present could not afford the high
engineering costs. Therefore, the question we must
ask in relation to the green energy exploitation
is who owns what? If European, American, or
Japanese companies invest in this project by
providing capital, technology, and their
expertise, African dependence will continue
unabated as always, and this erstwhile African
problem is not clearly addressed by the AfDB or
the WE Forum.
If
Africans attempt to maintain their independence
and yet encounter the dilemma of depending on
Western technology and capital, it is still
possible to create growth poles in order to
attract FDI as the We Forum recommends, but we
must ask, “What are growth poles?” WE Forum
has an answer: “Growth poles are composed of
multiple simultaneous investments coordinated
throughout many sections with the purpose of
supporting self-sustaining industrialization in a
country. Growth poles projects are not oriented
around addressing indemnifying market failures,
but around capitalizing on and augmenting
opportunities that already exist in an economy.”
But
even with growth poles and FDI that can really
catapult self-sustaining economies and reinforcing
regional integration, African countries must be
able to foster some degree of self-reliance
because, in the final analysis, as Perroux argues
and the Report clearly states, “for an economy
to attain a higher income levels, that economy
should first develop within itself one of several
regional centers for economic growth.”
It
should also be known that African countries could
become success stories in attaining all the
necessary ingredients for regional integration and
global competitiveness if the groundwork for
public-private partnerships (PPPs) is laid down.
One good example of this viable strategy the
Report gives us is that of Madagascar: “In
Antananarivo-Antsirabe, PPPs have been established
in skills development for the garments, tourism,
and information technology industries. For
example, the growth pole includes a private
university and firms in the garment industry,
which have collaborated to offer the first textile
engineering diploma program in Madagascar.”
Similar
to the Madagascar PPP experience is that of
Ethiopia, which is not mentioned in the Report,
but one that I have discussed in my book. Based on
UNIDO’s findings, I have discussed linkages that
would “enhance enterprise competitiveness
through the realization of economic of scale and
scope and are a source of sustainability, as they
increase of the economic actors [ability] to
collectively react to crisis and turning points.
Linkages also pave the way for broad-based and
inclusive development, where the poor among
entrepreneurs and workers participate of economic
activities on fair terms.”8
Furthermore,
in order to explain Ethiopia’s efforts in the
realization of PPPs, I have argued as follows:
“Interestingly, although networking and linkages
are at their infancy vis-à-vis the expanding
trade and industry in the country, in some
instances the significance of linkages has been
appreciated and even implemented. A good example
of the linkage effort is the initiative taken by
Adama University in the Oromia Regional State of
Ethiopia. The University has signed an agreement
with the National Association of Ethiopian
Industries (NAEI), an overarching organization for
the various industrial associations, to produce
skilled workforce for the Ethiopian industrial
sector.”9
Finally,
I like to reflect on democracy, good governance,
transparency, and accountability, which in my view
should be prerequisites to the realization of the
recommendations put forth by WE Forum. As I have
pointed out earlier, although democracy is not a
precondition to development, it is nonetheless a
vital and necessary vehicle to the smooth
administration and running of an economy, at firm
level or at national level. Without transparency
and accountability, it would be simply impossible
to fight the endemic corruption that pervades
African governments that has also metastasized in
the private sector, and in this sense the
democratic process could play a catalytic role in
lessening or eliminating this major problem.
On
top of democratic governance, it is of utmost
importance that African nations consider the HDI
factor in their development strategies. Based on
my principled stands, visionary outlook, and
philosophical underpinnings, I have endorsed the
UNDP’s HDI, which comes very close to my
philosophy of social constructivism, which, in
turn, advocates the necessity of significant
changes in society in order to overcome injustice,
inequity, and other social ailments. Among the UN
agencies, UNIDO and UNESCO have done their part
over the years to help nations realize just and
equitable societies, but the UNDP stands out in
this effort.
The
WE Forum should have included some data and
rationale of the UNDP 2013 Report in order to
address the many social issues that are also
inextricably linked to economic growth and
development. The UNDP is grassroots oriented and
people-centered UN agency and as such prescribes
the participation of people in development.
“Unless people can participate meaningfully in
the event and process that shape their lives,”
says the UNDP, “national human development paths
will be neither desirable not sustainable.”10
The
UNDP 2013 Report (henceforth UNDP Report) poses a
question, “how have so many countries in the
South transformed their human development
prospects?” and answers it as follows: “Across
most of these countries, there are three notable
drivers of development: A proactive developmental
state, tapping of global markets and determined
social policy and innovation.”
Among
the three UNDP Drivers, although I am most
interested in the ‘proactive developmental
state’ that I have discussed in detail in my
book, I will briefly examine all three drivers. In
this paper, however, instead of quoting my own
work, I am going to refer to the UNDP’s Drivers
so that readers can get the flavor of different
perspectives:
-
Driver
1: a proactive developmental state: A strong,
proactive and responsible state develops
policies for both public and private sectors
– based on a long-term vision and
leadership, shared norms and values, and rules
and institutions that build trust and
cohesion. Priorities need to be
people-centered, promoting opportunities while
protecting people against downsize risks.
-
Driver
2: tapping of global markets: Global markets
have played an important role in advancing
progress. All newly industrializing countries
have pursued a strategy of “importing what
the rest of the world knows and exporting what
it wants.”
-
Driver
3: determined social policy innovation: the
aim should be to create virtuous cycles in
which the growth and social policies reinforce
each other. Social policy has to promote
inclusion – and provide basic social
services, which can underpin long-term
economic growth by supporting the emergence of
a healthy, educated labour force. Not all such
services need to be provided publicly. But the
state should ensure that all citizens have
secure access to the basic requirements of
human development.11
In
concluding this essay, I like to address the
conundrum surrounding transnational corporations (TNCs)
in relation to the new opportunities that the WE
Forum has underscored and the promising scenario
of ‘the rise of the South’ that the UNDP has
heralded. I am inclined to accept both premises
because it is through regional integration and the
right economic policies that Africa could become
competitive in the global trade as the WE Forum
recommended, and as the UNDP noted it is quite
impressive to witness that 87% out of 107
developing countries “can be considered globally
integrated”12, although most African
countries are lagging behind and the world has not
yet resolved the unequal partnership between TNCs
and developing nations. While TNCs can contribute
to FDIs, they could also have an impact on local
or host economies; and since TNC’s for the most
are governed by expediency in promoting their
interests, they can go to the extent of
controlling firms across national boundaries and
as I have pointed out earlier, the ‘who owns
what’ puzzle could simply manifest persistent
inequality in the global economy. There is no
global regime to regulate the unfettered and
almost inexorable undertaking of the TNCs
worldwide and emerging economies as well as
regionally integrated African nations must come
with their own rules in negotiating international
trade.
References
-
Andrew
M. Kamarck, The Economics of African
Development, Frederick A. Praeger, 1967,
p. 13
-
Economic
Commission for Africa (ECA), Trade and
Investment Policy in Africa, December
1997, p. 2
-
ECA,
Ibid, p. 54
-
ECA,
Ibid
-
Institute
of Development and Education for Africa
(IDEA), Hail The East African Common Market,
www.africanidea.org/IDEA_halls.html.
July, 2010
-
Ghelawdewos
Araia, Ethiopia: Democracy, Devolution of
Power, and The Developmental State, IDEA,
2013, pp. 171-172
-
Ghelawdewos
Araia, Zaire: Reminiscence and Prognosis,
African Link, Second Quarter, Volume 6, No. 2,
1997
-
Ghelawdewos
Araia, Ethiopia: Democracy, Devolution of
Power, and The Developmental State, op.
cit. p. 200
-
Ghelawdewos
Araia, Ibid
-
UNDP,
Human Development Index Report 2013, p.
9
-
UNDP,
Ibid, p. 5
-
UNDP,
Ibid, p. 6
NB:
All other quotations in the text are taken
directly from the WE Forum African Competitiveness
Report 2013
All Rights Reserved. Copyright © IDEA, Inc.
2013
Thank
you to all our supporters and subscribers of IDEA.
Have a peaceful, constructive, and peaceful 2014
|