Paper - Initiative for Policy Dialogue

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A World Bank team working on this issue, looking at the experience of several East
Asian countries, found much of relevance for Africa in adopting a short-term, quickresults
strategy linked to attracting DFI in non-extractive activities. Singapore provides
an example. The Government invited India’s Tata industries to invest in Singapore and
offered to subsidize or pay for the much of the costs of training whilst Tata supplied the
equipment and trainers. It also worked with the French and Japanese governments to
establish an electronics training and a higher technology institute, respectively. Malaysia
and Ireland were also examples of countries that had successfully pursued public-private
partnerships and/or established and subsidized technical training for skills needed by the
private sector. In Africa there are beginnings of this type of approach e.g. in Ghana,
Mozambique and Nigeria. There are then the longer-term challenges of raising the quality
of training and relating the supply of trained people to demand for them.
International Context
Africa’s development, like that of so many other developing countries, is greatly
affected by globalization: both flows of goods and services, capital, and labor, and ideas
about how development should proceed. “Impact of Globalization and Liberalization on
Africa” is the subject of a wide-ranging review by Jomo and von Arnim. The issues
raised included the problems of declining terms of trade for primary exporters (the
Singer-Prebisch thesis); market access; capital outflows, debt, aid and DFI. In their view
globalization and liberalization had not nearly been as beneficial to Africa as they could
have been; indeed it was not entirely clear that their impact on Africa had been positive.
There are two sets of questions: one is how to make the international system more Africafriendly
(e.g. by improving the quality and quantity of aid) and the second is how Africa
should respond to the changing global context. These issues are to be examined further in
the future work of the task force (see below).
Deepak Nayyar examines the growing importance of China and India as aid and trade
partners of Africa, and the implications for Africa of the rising importance of China and
India in the world economy. On the trade front, there are both substantial challenges and
opportunities; they are formidable competitors as well as large and growing markets.
VIII. Issues to be Explored and Concluding Comments
The Next Phase
Some issues that are not covered in this volume have been flagged as of particular
importance for sustained and equitable growth for Africa, and will be covered in a
subsequent volume (reflecting the work of the Africa Task Force in its last meeting, held
in Pretoria). These include, notably those of i) finance; ii) agriculture; iii) climate change;
and iv) aid.
Sustained and reasonably rapid growth is hardly possible without businesses having
adequate access to credit at reasonable real interest rates. The absence of such access to