Africa Policy E-Journal

Africa: Economy Updates
Date distributed (ymd): 990731
Document reposted by APIC

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Region: Continent-Wide
Issue Areas: +economy/development+
Summary Contents:
This posting contains three recent press releases noting initiatives by African countries to form common positions for present and future international discussions on trade, investment and debt, including the December 1999 Seattle conference of the World Trade Organization, the tenth session of the UN Conference on Trade and Development (UNCTAD) in Bangkok in February 2000, and the current World Bank/IMF review of the Heavily Indebted Poor Countries Initiative (HIPC). A parallel posting today contains updates on recent U.S. economic initiatives related to Africa.

Additional links and background on these issues can be found at:
http://www.africapolicy.org/docs99/tr9902a.htm

http://www.africapolicy.org/docs99/tr9902b.htm

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Economic Commission for Africa
Press Releases on Africa,
Upcoming Trade Talks, and the HIPC Debt Initiative

Please visit the ECA web site at http://www.un.org/depts/eca for relevant documents and further information on these meeting, or contact:

The Communication Team
Cabinet Office of the Executive Secretary Economic Commission for Africa
United Nations
P.O. Box 3001, Addis Ababa
Ethiopia
Tel: +251-1-51 58 26; Fax: +251-1-51 03 65 E-mail: ecainfo@un.org

ECA Press Release No. 80/1999

For Immediate Release

African negotiators meet in Addis Ababa to prepare for Seattle and UNCTAD X

Addis Ababa, 21 July 1999 (ECA) - Geneva-based African negotiators, representatives of regional economic communities, and experts from relevant UN agencies kicked off a three-day meeting here today to help prepare African countries for the latest rounds of important global trade forums.

The meeting -- organized by the Economic Commission for Africa (ECA) in collaboration with the Organization of African Unity (OAU), UN Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) -- is in anticipation of the upcoming Third WTO Ministerial Conference to be held from 30 November to 3 December 1999 in Seattle, USA, as well as the Tenth Session of UNCTAD scheduled for 12 to 20 February 2000 in Bangkok, Thailand.

Opening the meeting at ECA today, Ms. Lalla Ben Barka, Deputy Executive Secretary, noted that one of the fundamental challenges facing Africa as the new millennium loomed was "adapting to the momentum of globalization and liberalization of global trading markets in goods and services, within the framework of the rule-based multilateral trading system, and the implacable process of liberalization of financial markets."

Globalization and liberalization of the world economy, said Ms. Ben Barka, had indeed created opportunities for economies that were well-prepared or had sufficiently adjusted to the challenges and exploited the expansion in world output and trade. That said, "Africa has been among the regions that have not fared well, as reflected in the decline in its share of world trade which stands now at only 2 percent".

Among other issues, the meeting aims at:

• Elaborating specific proposals reflecting African concerns vis-a-vis the multilateral trading system that are to be submitted to the General Council of the WTO before the end of July 1999;
• Looking at the parallel African Caribbean Pacific - European Union (ACP-EU) negotiations and proposing appropriate African strategies towards securing a waiver at the WTO for the trade arrangements in the successor agreement to the Lome IV Convention; and
• Addressing the main issues of concern to African countries in regard to UNCTAD X, including deliberations on the text of a draft "African Ministerial Declaration on UNCTAD X".

Experts say that for the Seattle WTO Ministerial Conference and the negotiations in the new millennium to work in Africa's favour, they need to focus on a number of key issues, including:

• The need to structure a development dimension to WTO Agreements and the agenda of the multilateral trading system;
• Lifting supply constraints in African countries, especially least-developed countries;
• Addressing the problems of African countries in meeting the continual evolving quality and technical standards for exported goods;
• Advocating for further negotiations on tariff peaks and escalation, as well as for flexibility on tariffs for those LDCs that may require such flexibility; and
• Examining the implications of further negotiations of trade in services, including air transport, maritime services, telecommunications, financial services, and addressing limitations to most-favoured-nation exemptions.

Participants at the meeting expect the positions they evolve this week to be taken up by African policy makers at the forthcoming Conference of African Ministers of Trade being organized by the OAU with UNCTAD and ECA in Algiers, Algeria from 6 to 9 September this year.

ECA Press Release No. 81/1999

For Immediate Release

Seattle, UNCTAD X should reflect "genuine commitment" to Africa's growth

Addis Ababa, 23 July 1999 (ECA) - A three-day meeting convened to formulate common African positions on key global trade issues ended here today with a call for developed countries to ensure that Africa received a fair and balanced deal between rights and obligations within the World Trade Organization (WTO) regime.

The meeting also underscored the need for UNCTAD, along with other regional organisations, to assist African countries formulate national policies consistent with their individual development realities.

It also stressed the need for UNCTAD X to be an occasion for the launching of a new initiative that would bring about greater coherence between UNCTAD and the Bretton Woods institutions in translating policy ideas into practical programmes at the country level.

The meeting was organized by the Economic Commission for Africa (ECA) in collaboration with the Organization of African Unity (OAU), UN Conference on Trade and Development (UNCTAD) and the WTO, in anticipation of the upcoming Third WTO Ministerial Conference to be held from 30 November to 3 December 1999 in Seattle, USA, as well as the Tenth Session of UNCTAD scheduled for 12 to 20 February 2000 in Bangkok, Thailand.

According to a draft report prepared by the African Group (UNCTAD) in Geneva, entitled, ' Africa's Development Challenges and Actions Required in the Context of UNCTAD X and Beyond', critical sectors of the continent's economy exhibit poor performance, while "Africa's continuing marginalisation is increasingly defined by the continent's very low absolute level of exports and decreasing share in world trade during the past four decades".

The paper called for UNCTAD X to set the stage for a genuine international commitment to Africa's growth and sustainable development in the new millenium, with the conference taking urgent action to strengthen the countries' capacity for sustainable growth and development.

According to a statement read on behalf of the Chair of the African Group in Geneva, Ambassador George Sipho Nene of South Africa: "It is clear that without a substantial reduction in the level of external debt, the marginalization of Africa will continue. [...]. During UNCTAD X, an attempt should be made to mobilise support to widen the HIPC initiative to include more countries while criteria to define debt sustainability should be recast to not only focus on the export and fiscal ratios, but also take into consideration development indicators."

The meeting recommended that:

• Progress achieved in improving WTO transparency should be achieved through a broader policy of document de-restriction and informal means for dialogue with civil society;
• Further measures to enhance transparency of WTO operations should be looked into;
• The imperative of the forthcoming mulilateral trade negotiations not diverting attention from the need for a streamlined and accelerated accession process, particularly for LDCs;
• The automatic granting of special and differential treatment provisions to acceding developing countries as stipulated in the respective WTO agreements;
• That acceding developing countries should not be pressured to join Plurilateral Trade Agreements or accept optional sectoral market access initiatives;

ECA Press Release No. 83/1999

Debt Relief Must Focus on Poverty Reducation,
Institutional Reform and Transparency

African stakeholders reach consensus on key areas for
reforming the Highly Indebted Poor Countries (HIPC) Initiative

Addis Ababa, 23 July 1999 (ECA) -- "Broader, deeper, faster debt relief will only be effective if funds released from debt servicing actually reach the poor. " This was the firm consensus of a high-level meeting of African governments, bilateral and multilateral creditors, United Nations agencies, and leading non-governmental organizations from industrial and developing countries gathering at the United Nations Economic Commission for Africa (ECA) in Addis Ababa.

The meeting, organized in cooperation with the World Bank and International Monetary Fund, took place from 29 to 30 July.

"This is the very first time that all stakeholders have been represented around one table. Here in Addis Ababa we have a unique opportunity to really help the poor, not just by agreeing on more effective use of debt relief, but by beginning an ongoing dialogue which can lead to the common development of economic and social policies to lift millions out of poverty," said ECA Executive Secretary K.Y. Amoako.

The two-day meeting was part of a comprehensive review of the Heavily Indebted Poor Countries (HIPC) Initiative, an international debt relief programme administered by the International Monetary Fund (IMF) and World Bank. The Initiative, established in 1996, is designed to significantly reduce the external debt of some 40 of the world's poorest, most heavily indebted countries. So far four countries have completed the HIPC process (including Uganda and Mozambique), receiving about $5.5 billion in debt service relief, and six more countries have received preliminary commitment of debt relief totalling another $3.4 billion.

While the Initiative has marked a significant step forward, civil society around the world has called for the programme to be strengthened. Toward that end, the boards of the Bank and IMF in September called for a comprehensive review of the programme, with full participation of all stakeholders. In June, the G-7 proposed a major expansion of the programme, which would both increase and speed up the amount of debt relief delivered to poor countries. This week's meeting in Addis, which set out specific ideas on linking debt relief to poverty reduction, is a direct result of this global discussion.

Representatives reached broad consensus on the following points:

• Debt relief must be firmly linked to a broader approach to long-term poverty reduction and economic growth. Strategically targeted debt relief must be an integral component of a country's poverty reduction policy strategy, not an end in itself.
• Establishing an effective, transparent linkage will be a complex and long term challenge, requiring development and implementation of a wide range of social, economic, financial and political reforms. Specific areas include improved budget management; development of a medium term expenditure framework; poverty-focused public spending priorities, with a clear view toward achieving the 2015 international poverty targets.
• To be successful, such reforms must be pursued with the broadest participation of civil society, including NGOs, community groups, the media and the private sector. Emphasis should be placed on improving parliamentary processes, strengthening the role of the media and local groups in monitoring implementation and the outcomes of policies, and drawing clear lines of accountability.
• Creditors, particularly the international financial institutions, must avoid excessive conditionality. Performance criteria should reflect a balance between sound macroeconomic policies and structural reform joined with social and institutional strengthening, working together to reduce poverty. Donors should seek to coordinate their assistance in the context of poverty reduction action plans.
• Governments and International Organizations can learn much from the success and failure of other country experiences. Many countries have developed programmes designed to channel debt relief directly into poverty reduction programmes integrated within the budget, often in the education and health sectors. Many representatives suggested that the success of these programmes could be complemented by programmes that direct funds to employment-generating initiatives such as micro-credit programmes and private sector development.
• Participants welcomed the frank and informative dialogue, and hoped it could be continued.

Discussions will continue throughout the summer, leading to September's Annual Meetings of the World Bank and IMF, with a view toward reaching an agreement on an expanded framework. It is expected that by this time ministers will endorse an enhanced HIPC framework that could provide significantly more debt relief at an earlier stage. Moreover, specific attention will be given to placing debt relief within a context of overall poverty reduction and economic and social development.

For detailed background on the HIPC initiative, please visit the following web sites:

http://www.worldbank.org/html/extdr/hipc/ http://www.imf.org/external/np/hipc/hipc.htm

Or contact:

Anthony Gaeta External Affairs Department E-mail: Agaeta@worldbank.org

Gita Bhatt External Relations Department E-mail: gbhatt@imf.org

The ECA web site also contains extensive data on HIPC, particularly as related to the push by African countries for a more inclusive initiative. It can be found at: http://www.un.org/Depts/eca

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