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Leonce Ndikumana, director of the African Policy Program at the Political Economy Research Institute, says aid and timing coupled with a national economic development strategy by sector is required for success

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SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome back to The Real News Network. I’m Sharmini Peries coming to you from Baltimore. I’m in conversation with Leonce Ndikumana from PERI. He’s a professor of economics at the University of Massachusetts in Amherst. He’s the director of the African Policy Program at the Political Economy Research Institute, PERI, and the author of the paper Capital Flight From Sub-Saharan African Countries. We are mid-conversation we are having about 20 of the 54 countries in Africa deemed fragile states. And in our first segment, we discussed some of the issues that they’re facing and what the sum of the recommendations have been from PERI and the African Development Bank in terms of addressing them. But in the process, we discovered that some countries are actually making some progress post-conflict. So this session is dedicated to that. Leonce, thank you again for joining me. LEONCE NDIKUMANA, DIR. AFRICAN POLICY PROGRAM, PERI: Thank you very much for the opportunity. PERIES: So Leonce, we ended the last segment by stating that there are some countries that post-conflict are making much progress. And so I thought we should dedicate this segment to that. Can you give us some examples of the progress being made? NDIKUMANA: Thank you very much. Yes, as we said in the first segment, fragile states are facing numerous challenges. But it’s also important to note that among the fragile, the countries that have faced difficult past histories of conflict, there are some that have made a substantial amount of progress and continue to make progress. In a few cases they actually have overcome fragility. So you have countries which are post-conflict countries and no longer classified as fragile states. The two examples in Africa are Mozambique and Rwanda. And it’s important to underscore that point because it basically means that these countries, although fragile, although fragile states, can actually overcome fragility. In both cases what you find is that they have been able to deliver on economic development. So you find steady improvement in terms of overall economic performance, in terms of growth. These are countries that have posted growth rates in excess of 5 percent for many consecutive years. You have also in these countries, they have been able to improve social and human development outcomes in terms of education, health, access to basic services. They have built very good infrastructure. But then also in those countries you find that the private sector is actually booming. They have a dynamic private sector, which–it helps, in terms of creating more opportunities for jobs. And the question is then, is why did those countries succeed? In some cases, I’m going to use the case of Rwanda, most observers will jump easily on the fact that this country has had a large amount of aid. But actually if you look at the amount of aid that the country has been receiving, say in terms of capital, yes. It’s higher than, say, average. It’s higher than say, in Burundi. But it’s not, there are many countries that have much higher volumes of aid, have not developed as much. Yes, aid does help. Especially when it comes at the right time, immediately after the conflict, and it’s used to finance programs which–projects which are part of a consistent national strategy. And this is the key point. The key point is that in all these countries that succeed to overcome fragility and conflict, they have a very solid, clear national development strategy that involves both an overall macroeconomic framework, but also very well-designed sectoral strategies. By sectoral strategies I can give the example of agriculture. In the case of Rwanda, this is a country that’s, as we, as people who know Rwanda, it’s an agricultural country. The majority of people are in the rural area. But it also has potential in terms of they can grow almost anything they want. But also they have scarce land. So you have to be very, very strategic in terms of increasing productivity, encouraging–I mean, fostering access to market for producers so they can sell their outputs. But the primary objective has to be initially to safeguard food security. And in this country that has been achieved. The same for Mozambique. But at the same time then you move up in terms of generating income from agricultural activities, are also increasing, developing it higher into the value chain. I was pleasantly–every time I go to, I go to this two countries I’m pleasantly surprised that I find new domestically produced manufacturing products which, from agriculture. When you go to Rwanda, you go in the grocery store, you find bottled milk from Rwanda. You find jam made in Rwanda. These are products which are grown in the country and processed in the country. What is the implication? The implication is that it provides income to the farmers that are growing those products. It provides jobs for the, in the factories that are making those products. It reduces the country’s needs for foreign exchange reserves, because they don’t have to import those products. So all these things add up to make agriculture a more productive sector, a more employment-generating sector, and a more growth-promoting sector. In the case of Mozambique, it’s a country that’s rich in mineral resources. They have received, been blessed by a substantial amount of investment in the mineral sector. But so are other countries that are struggling to overcome conflict. For [example], the Congo. The Congo receives huge amounts of investments in the mineral sector. But because it’s still lacking the institutional basis, the institutional framework for managing the natural resources, you do not see the benefits in terms of development. PERIES: Leonce, that’s a very important point. Obviously both Mozambique and Rwanda’s success is prefaced by a leadership that actually understands some of these issues and problems, and therefore want–there’s a great desire to address them. What does the leadership of these countries look like, and how long have they been in this process of progress? NDIKUMANA: In both countries you–as you said, you have governments which seem to be very much in control of what they want to do in terms of development policy. They have a clear national development strategy from all perspectives. And it’s well-crafted, it’s technically sound, and that’s–it’s not by chance. Because these countries have built up the human capacity to be able to develop that kind of skill. I recall that after the genocide in Rwanda, one of the major strategies that, major efforts that was done by the government was to send people to school. You need to send people to school, both in Rwanda, in other countries. They brought in expertise to revamp their universities. And now when you go to these, to the government, you see that there is technical capacity. And that’s very important. The same for Mozambique. But at the same time you also have a government that have a very consistent vision on development, both short-term and long-term vision. And then you have to find ways to hold people accountable so that they deliver. In many countries when you–there are other countries that have good national development plans. But they’re not well implemented. In that case what’s missing is the kind of accountability and discipline of the government to deliver on the plans. PERIES: And how long has it taken for them to get these positive indicators? NDIKUMANA: Development does take a while. The development is an incremental process. I mean, reducing poverty is not something you do overnight, but every year you must make sure that you are making progress. So in the case of Rwanda, this is the country in 1994 that went through a horrible genocide, but now we can see that the country is in very, very solid footing in terms of development strategy. Mozambique also, as we know, has gone through very painful independence war. But now it’s stable, has a very good, has very good institutions. And that helps in terms of attracting domestic investment [inaud.] foreign investment. PERIES: Leonce Ndikumana, from PERI. Thank you so much for joining us, and actually giving us not only an analysis of the problems but some of the solutions as well. NDIKUMANA: Thank you so much. PERIES: And thank you for joining us on The Real News Network.


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Leonce Ndikumana is Professor of economics and Director of the African Development Policy Program at the Political Economy Research Institute ( at the University of Massachusetts at Amherst. He is a member of the United Nations Committee on Development Policy, Commissioner on the Independent Commission for the Reform of International Corporate Taxation, a visiting Professor at the University of Cape Town, and an Honorary Professor of economics at the University of Stellenbosch, South Africa. He has served as Director of Operational Policies and Director of Research at the African Development Bank, and Chief of Macroeconomic Analysis at the United Nations Economic Commission for Africa (UNECA).