"Growth without resilience is but the ruin of the economy" Abdoulaye Mar Dieye's Interview with Financial Afrik
26 Apr 2017 by Abdoulaye Mar Dieye
Abdoulaye Mar Dieye
Growth without resilience is but the ruin of the economy
Financial Afrik: Many African countries have engaged in medium- or long-term emergence programmes. What is your overall analysis of the situation?
This is a topical issue. I am aware of a total of 27 African countries engaged in a process of emergence. I have read all 27 of their emergence plans and have had active discussions with the authorities in these countries. For the Second International Conference on the Emergence of Africa (ICEA) in Abidjan, we focused specifically on a sample of 13 countries, to explore the issue of emergence more deeply. This sample was fairly representative of the economic and geographical situation in Africa. The aim was firstly to check the empirical validity of the model developed at the first ICEA in 2015 and to see whether it was being implemented. That was in fact the first time that emergence had been defined. This model hinged on a developmental state with a long-term vision and a fiscal space strong enough to support this vision. This would be reflected in a policy of structural economic transformation. The third element would be that the policies developed would have a profound impact on human development.
In studying all 13 sample countries, what struck me most was the typology of emergence paths. I identified three types. The first type is countries such as Rwanda and Côte d'Ivoire, which have experienced significant shocks due to war or political instability and have seen their economic growth fall to its lowest level, but have then resumed rapid progress towards high growth. I tried to establish what was behind this rapid recovery. These countries still had surplus production capacity that had not been destroyed, and they had the intelligence to develop these “excess capacities” to restart growth. They also invested in increasing their productivity and in building the resilience of their institutions. This was unlike countries such as Liberia, Sierra Leone or Guinea, which did not have resilient institutions. This is the first type of emergence path adopted in Africa.
The second type is countries such as Senegal, Gabon and Kenya, which have focused on intensifying structural reforms until they reach a tipping point. This has then triggered a process of almost self-sustained endogenous growth. You will remember that Senegal had growth rates of around 3 percent in 2011 and 2012, whereas it has approached 7 percent in 2016 and 2017. The main lesson learned from this is that, despite the difficulties mentioned by President Macky Sall, there is a need for intensification to initiate a growth process at the core of emergence.
The third type comprises countries that have been on this path for longer. These are countries such as Cabo Verde, Mauritius and subsequently Ethiopia, which essentially activate engines of growth in a 10 to 15-year cycle. The lesson I have learned is that the engines of growth are not indefinite; they have life cycles that mean that they need to be rekindled and readjusted every 10 to 15 years.
The crosscutting lesson is the presence in all these trajectories of leadership and vision. In my opinion, this is the most fundamental element.
Financial Afrik: Leadership and vision, you say. Then could the problems with implementation be framed as the lack of strong leadership capable of turning the vision into reality for all actors involved?
There are a number of limitations. We are not convinced that in every case the vision is reflected in a social contract. It is unclear whether citizens are fully committed to the vision. This is very important. Emergence is not only an issue of economic policy; it is also a matter of citizen engagement and mindsets. In this respect, I've noticed something of a gap between the vision laid out by the Heads of State and the commitment of citizens to these programmes. The other limitation I've noticed is that the vision is defined by governments or political parties, not necessarily with the commitment of other political parties. This worries me, as the presence of political parties often correlates with four- or five-year electoral cycles. Development, however, is a long-term vision. In some countries in the past, I’ve seen political parties come to power and overturn the vision launched by their predecessors.
To ensure long-term stability, it is essential to involve other political actors in developing and implementing the vision. You are correct in saying that there is a problem with insufficient implementation. However, I welcome the fact that emerging countries have raised the institutional level of coordination, often to the Head of State or the Prime Minister, to elevate programme delivery. This is in contrast to development plans with anchorage points mainly at the ministry level.
Financial Afrik: Does the culture of good governance and accountability need to be shared with the population to enable emergence?
What I referred to earlier, what I called the social contract, meaning commitment by the population, is very important. Governance does not mean only economic and political governance. Social governance is very important. I see all three dimensions of governance as critical in embarking on emergence paths and in making these paths sustainable. Because, after all, development is a matter of mindset and culture; if we don’t take this into account in emergence, we won’t get very far.
Financial Afrik: UNDP is a multidimensional partner for African development. What flagship programmes are you currently involved with?
I’m currently focusing my involvement with UNDP in Africa on three key aspects. The first aspect is the issue of emergence, as I wanted to support this trend. Remember that, after the two “lost development decades” of the 1980s and 1990s, we entered the first decade of this millennium as a continent with an average GDP of US$570 per capita. So it was a very impoverished continent. Fifteen years later, at the close of the Millennium Development Goals (MDGs) era in 2015, an average annual growth rate of 5 percent in real terms had brought GDP up to $1,750 per capita. It was a huge leap. And we realized we needed to support this. That’s why we held the conference on emergence, recognizing that growth is not enough: it needs to be supported by structural transformation, and to trickle down to the population level. So, in reply to your question, I would say that my primary involvement is in supporting this growth trend; ensuring that it is structural, that it results from structural transformation, and that it has an impact on the population.
Secondly, my support is focused on fragility, inequality and emergency issues. In essence, to achieve inclusive development, growth needs to reach all sections of society and all territorial areas. It is here that we are getting involved to support resilience, fragility and emergency issues.
The third aspect in which I am involved relates to youth and security issues: the radicalization and violent extremism that are threatening to rob us of our potential for development, our strength and our youth. UNDP is currently investing heavily in this issue, from a perspective of development, youth employment, etc. These are my three target areas.
Financial Afrik: In his speech alongside the conference on emergence, President Macky Sall applauded the achievements of the Emergency Community Development Programme (PUDC). What is UNDP's role in this project?
This programme comes under the second priority I mentioned: that of emergency and fragility issues. President Macky Sall asked us to join him in reflecting on this programme, specifically to correct horizontal and vertical imbalances: income imbalances but most of all, imbalances in terms of population groups and regions. This is because in Senegal, as elsewhere, high economic growth is not having enough impact on living standards in certain population groups and in peripheral areas. Hence the Emergency Community Development Programme. President Sall requested our involvement over an 18-month period, as a first step. The programme represented an investment of $200 million to support community initiatives. President Sall was very pleased with the outcomes. We recently held a regional debrief meeting in Dakar. Following this meeting, Senegal committed to the second phase, investing $600 million over two years. Meanwhile, Togo launched its Emergency Community Development Programme. Twenty other countries have asked for our support. This is a way of supporting the economic growth path, to ensure that the impact is felt among the grass-roots populations and regions. It is important that not only is the impact of development felt, but also that the regions contribute to this development. That’s the philosophy behind the PUDC.
Financial Afrik: Let’s talk a bit about the international context, with a new President in the White House raising fears that US contributions to the UN system will be reduced, either directly or indirectly. What are the views of the management of UNDP in Africa on this?
The situation you refer to is representative of a rather more complex trend we have seen emerging in recent times. There is a slide in international cooperation away from multilateral and towards bilateral support. This is in a context where various forms of nationalism are emerging. It is contrary to the spirit in which the United Nations was created, where its multilateral approach was seen as a sort of positive-sum game where everyone was a winner. People felt that this paradigm, on which the spirit of the United Nations was based, was losing momentum and was no longer effective. Of course, informed actors do not consider this to be the case. Personally, I feel we need to educate those who are inclined to promote nationalism. They are playing with fire, even to their own detriment. All economic, philosophical and political theories show that populism cannot win in the long run. History shows that turning inward is generally suicidal. Therefore, I call on all those with an inclination to develop this populism and nationalism to learn from history and look to the future. We cannot hold back the world of tomorrow. We are moving towards a connected, multipolar world. This is the overall trend. We will pay the price if we do not move with it.
Financial Afrik: The year 2016 was a very difficult one for Africa. What lessons should be learned from the over-reliance of our economies on primary commodities? What is your overall forecast for growth in 2017?
Some perspective is needed when we say that it was a difficult year. Because, when we examine economic growth in Africa during the ascending period of 2000–2015, we can identify three factors. First and foremost, good economic and political governance was a determining factor. The second factor was the increasing power of the middle class, which had a Keynesian effect on demand. The third factor was the primary commodity boom. So we need to put it into perspective, as primary commodities represented only one third of the contributing factors. Growth in Africa has therefore been two-thirds endogenous. We need to apply even greater perspective as the President of the African Development Bank, Akinwumi Adesina, stated in his speech at the Abidjan Conference that we can identify three paths beyond 2015. Some countries are currently falling below the 5 percent rate. Countries that are mostly reliant on primary commodities, such as Angola, Gabon, Equatorial Guinea and Nigeria, are currently growing at less than 2 or 3 percent, lowering average growth in Africa. A second group of countries are continuing in the 5 percent trend. Then there are countries, in particular the 13 emerging countries that were assessed, that have risen above the trend. Côte d'Ivoire has 9 percent growth and is tending towards 10 percent; Senegal is at 6 percent. It must therefore be put into perspective, remembering firstly that Africa is not a single entity. There are many countries in Africa, which are following different paths. The lesson we want to impart now is to follow the top performers. These top performers are essentially at the top because they have built resilience into their economies. There is an enduring quote from Rabelais: “Science without conscience is but the ruin of the soul.” I would paraphrase this by saying, “growth without resilience is but the ruin of the economy”. By building resilience into our economies, as countries such as Senegal and Côte d'Ivoire have done, we can move towards double-digit growth.
This interview was originally published in Financial Afrik.