overcoming fragility in africa forging a new european approach presentation of the erd 2009...
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OVERCOMINGFRAGILITY IN AFRICA
Forging a new European approach
Presentation of the ERD 2009Stockholm, 22nd October 2009
Giorgia GiovannettiEuropean University Institute, Robert Schuman Centre
and University of Firenze
Need to reassess EU development policy towards SSA fragile countries
• The framework: 2008–09 crisis– The crisis has hit the budgets of the EU: huge debt
overhangs, unemployment and social problems. – The crisis has hit fragile countries, despite low financial
integration: high social costs, halt to progress.
• SSA’s dire socioeconomic situation calls for a renewed commitment but EU domestic concerns may displace attention and funds.
• The EU must keep/strengthen its commitment: cost of disengagement are too high (internally and for fragile countries). So is the cost of inaction.
• But need for efficient policies.
The European Report on DevelopmentThe European Report on Development
• The 2009 European Report on Development analyses:– the costs and characteristics of fragility – the capacity of fragile countries to cope with negative
shocks (2008-09 financial crisis), – the EU’s current engagement with fragile countries – the potential for EU development policy to assist
national stakeholders in enhancing resilience.
• The focus is on Sub-Saharan Africa: a region which is lagging behind in the sphere of state consolidation;
• Sub-Saharan African countries account for most fragile states, no matter how measured.
Which Sub-Saharan African countries are
fragile for the ERD analysis?
Why a focus on countries in situation Why a focus on countries in situation of fragility?of fragility?
Fragility is a cost in itself: most fragile countries are in the last quintile of HDI Indices and lag behind in most MDGs
In fragile countries there are forms of violation of basic human rights to life and security
Fragile countries are a fertile land to organized crime and illicit trafficking
The interaction of fragility with the crisis increases the likelihood of breakout of conflicts
“ bad neighbor effects”
- Economic channel: forgone economic growth- Political instability - regional markets for weapons - cross-border movement of refugees- illicit flows
Threat to global security: External factors crucial in the initial revival of piracy (allegiances of over-fishing and dumping of toxic waste against foreign trawlers); controversial relationship between fragility and terrorism in Sub-Saharan Africa.
Common structural weaknesses
Inabilities to mobilize domestic resources and dependence on external sources
Low levels of human development (especially for women)
Bad governanceLow population density and low level of
urbanization, but young population Export very concentrated and
dependent on natural resourcesWeak soft and hard infrastructure (and
investment environment)
But also wide heterogeneity
Historical factors (colonization, institution building pattern etc)
Economic growth rates and levels of income per capita
Life expectancyCapacity to attract FDILevel of foreign reservesExternal Debt
Low capacity to cope with shocks
Resilience: low in most fragilecountries
Time to care about implementation
• Need to narrow the implementation gap between the theoretical framework and the design of specific interventions.
• Need to work with recognized informal institutions to understand the local context
• Need to adapt the principle of ownership to deal with incapacitated or illegitimate state institutions.
• Need to exploit the comparative advantage given by large range of EU policy instruments but being aware of possible indirect effects (security interferes with aid….).
Aid is only a part of development policies in fragile countries
• EU trade policy should be more responsive to the specific needs of SSA fragile states.
• There is a need to shift from responsive to
preventive interventions. – Such a shift could require moving towards a regional
approach to fragility, because the bad neighbour effects could jeopardize state building and social cohesion.
• The security development nexus has to be properly handled.
ERD suggests 5 key priorities to “narrow the gap”
• Support state-building and social cohesion.• Overcome the divide between short-term
needs and long-term resilience.• Enhance human and social capital.• Support better regional governance,
including regional integration processes • Promote security and development in the
region
EU comparative advantages• Large array of policies: trade, agriculture, fisheries,
security, migration, climate change, environment, social dimension of globalisation, employment, research and development, information society, energy, and governance
• Large experience providing a very useful “toolkit” to deal with fragility: during its own history of enlargement, the EU faced problems of transition from military dictatorship to democracy (e.g. Greece, Portugal and Spain in the 1970) and integration of very different countries.
• While can help building infrastructures, its comparative advantages lies in developing human capital and institutions
To have an impact, the EU should:
• Speak with one voice
• Be committed to long-term policies, avoid shifts in policy objectives, since fragile countries have structural and persistent problems, and a pervasive aspect of fragility is the inability to follow long-term objectives.
• Find the right partner to implement the policies. Donors and recipients may not be in a position to best implement programmes. It might be appropriate to separate policy formulation from fund allocations
• Understand that state building and social cohesion in Sub-Saharan African countries are long evolutionary processes, taking new, diverse and unpredictable forms at the country and regional levels. Such processes require constant attention and the right institutional support on the ground.
The challenge is responding to crisis The challenge is responding to crisis while solving Long Term weaknesseswhile solving Long Term weaknesses
• Short term policies have to be compatible with long term objectives
• The best for fragile African countries will be “do it alone”: mobilizing domestic resources, tap domestic saving, exploit regional integration
• Given dysfunctional state institutions, this is difficult, hence there is a role for donors
• Low resilience and short term answers to problems mean just “surviving”
Land investments for agricultural production in fragile countries
Source: World Investment Report 2009, UNCTAD
In enhancing their resilience, SSA fragile countries should account for internal and external dynamics
INTERNAL DYNAMICS: Generalized move towards
better governance and institution transparency
Important role for African Union
Establishment of Free Trade Areas
Infrastructural works: corridors (financial resources)
Fragile countries have limited capacity to cope (low fiscal space and no safety nets)
Likelihood of conflicts (social unrest) increases with a decline in income
EXTERNAL DYNAMICS: SSA is back to be at the
centre of interest of different international actors.
New emerging actors (China), particularly active
New approach to development from EU, member countries, US etc. (less conditionality, principle of ownership)
A possible role for EUA possible role for EU
• Help fragile countries to lengthen the time horizon of their policies. Short term policies do not allow to overcome fragility
• Dealing with fragile countries means interacting with illegitimate, unrepresentative or weak rulers: difficult for aid to reach the poorest and to operate in a long term perspective. Hence, it is important to interact with informal (recognized) institutions
• Inaction has very high costs to: contributes to persistence of development gaps
In summaryIn summary• Overcoming State fragility is a priority, especially in the
current context of crisis.
• The EU and other donors should not reduce engagement in fragile countries, though fragility tends to limit aid effectiveness.
• Engagement should take into account forces which can amplify or reduce fragility.
• Common characteristics of fragile countries allow to identify policy priorities of fragile countries and for the EU’s interventions
• Given the high heterogeneity among fragile countries, moving from priorities to specific prescriptions and guidelines for intervention requires deeply rooted knowledge of the ground and sometimes to find the appropriate partner for implementation.
Thanks!
ERD2009 Team
Low levels of human development
HDI: Of 179 countries, fragile countries rank between 128 for Sao Tome down to 179 for Sierra Leone, with the average HDI for fragile countries at 0.459 in 2006
Source: ERD elaboration based on UNDP Human Development Report (2008) and African Economic Outlook (2009).
Country groups
2008 HDI
Adult literacy rate, 2006
Under-five mortality rate (per 1,000), 2008
Maternal mortality ratio adjusted, 2000
Fragile 0.46 59.2 138 976
Nonfragile 0.54 66.4 97 614
SSA 0.50 62.9 123 824
Exposure to the worst forms of violations of basic human rights
Conflicts: Collier (2007) estimates that of people in the countries of the bottom billion, a proxy for the list of fragile countries, 73% have recently experienced or are in a civil war. Heavy impacts especially on most vulnerable groups such as women.
Food insecurity: 18 of 36 countries in food crisis requiring external assistance from FAO are fragile
Source: ERD elaboration on African Economic Outlook (2009) and FAOSTAT
Country groups Under-nourishment prevalence (percentage of total population) 2003-2005
Food availability (Kcal/person/day) 2003-2005
Fragile 35 2 097
Nonfragile 25 2 367
SSA 30 2 212
Progress towards MDGs is Progress towards MDGs is disappointing...disappointing...
Countries in situation of fragility in grey
A telling pyramid
Fragile countries
EU-27
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
100+
Male Female
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
100+
Male Female
0
20
40
60
80
100
120
140
160
180
200
Nig
eria
Gam
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Sud
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Leo
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Ang
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Gui
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Leso
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Tanz
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Mal
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Rw
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Difficult investment environment:Ease of Doing Business Rank of SSA
Fragile countries are at the bottom of the over 180 countries
Economic factors may help/hinder Economic factors may help/hinder fragile countriesfragile countries
• Trade openness: potential gains from trade but possible disputed rents from trade.
• FDI may improve the efficiency of the allocation of domestic resources, but without appropriate incentives, can contribute to bad governance and corruption.
• Natural resource wealth: taxes from resource extraction contribute to most government revenues in fragile states. But fragile states are also likely to fall into vicious circles linking bad resource management to fading state capabilities—the resource curse. Resource abundance has a positive effect on growth in countries with good institutions (Botswana), and a negative effect in those with poor institutions (Zimbabwe).
• Food security management: the occurrence of a food crisis can produce an adverse impact on state fragility, exacerbating the perceptions of the state’s incapacity or unwillingness to address chronic food insecurity or to protect its citizens from food shocks.
Vulnerability: no clear pattern