ACCRA, Ghana (TWN-Af)-28.09.07—The UNCTAD 2007 report on Economic Development has been launched in Accra. It is the latest in a series of yearly UNCTAD reports that provide additional angles on issues affecting Africa and the developing world.
This year’s report, entitled “Reclaiming Policy Space Domestic Resource Mobilization and Developmental States”, comprises four chapters dealing with the issues of domestic resources mobilization; increasing savings and barriers to investment in Africa; the “development state”; and “reclaiming and utilizing policy space.”
Setting the context for the launch, Coordinator of Third World Network-Africa, Yao Graham, explained that this report sought to answer how governments of developing countries fill the policy space with their own choices; as well as attempts at answering what the role of the state should be.
He contended that there was the need to balance the inflow from the informal sector of the economy against that of the formal sector, and that the odds were stacked up against the poor, which mostly comprised the informal sector – with a greater majority being populated in the rural areas.
Consequently, as a way of mobilizing resources for this particular sector, it was important that the credit to them be structured in a manner consistent with the way in which investment needed for development would be raised.
It is in addressing the specific issue of domestic financial resources that the UNCTAD report argues that an increased usage of such financial resources and more productive investments would provide African leaders the necessary “policy space” to define development programmes that mirror their countries’ genuine priorities.
The report states, in a manner that reflects an explicit support of the State, that “While not often mentioned, social policies were an important ingredient in the arsenal of developmental States. These policies revolved around non-state entities such as families and firms, with the State guaranteeing the implementation of social welfare programmes”. These State-led policies, the report contends, can be attained once there is “a fundamental shift in policy orientation away from the neoliberal stalemate.”
The report states explicitly that “it is a “strong State” that enjoys autonomy from social forces that might otherwise dissuade it from the use of its capacity to design and implement polices that are in its long-term interest”. The report also suggests that there are potential sources of domestic finance that could, if properly mobilized and efficiently invested, over time reduce Africa’s dependence on aid.
To that end, economic consultant Dr. Nii Moi Thompson, speaking at the launch, called for the establishment of a Continental Research Organisation that would serve the purpose of a think-tank to analyse, monitor and provide evaluation of international economic policies affected African countries.
Contending that there was not a one-size-fits-all prescription for African development, he argued that despite the fact that the private sector had been “reified” during the Reagan-Thatcher years of privatisation, it was important to remember that “Africa has peculiar economic, cultural and historical environment and that its development paradigm is far different from that of all European countries.” He therefore welcomed the UNCTAD report’s view of greater policy space for the developmental states of African economies.
Deputy Minister of Finance and Economic Planning, Prof George Gyan-Baffour, launching the report said that it was time to mobilize resources, reduce reliance on the state, and have an open discussion on the issue of policy space. He conceded that the policy space available for developing countries had shrunk so much that their ability to achieve any measure of economic development remained threatened.
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