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May 29, 2008

Speech Delivered to the TICAD IV Conference on May 29

Expanding Partnerships: Asia-Africa

JICA sponsored a symposium on "Economic Development in Africa and the Asian Growth Experience" on May 27. Amid the growing African interest in Asia, the symposium aimed at providing an opportunity to hear African leaders’ insights on the relevance of the Asian experience in accelerating economic growth in Africa. The event highlighted, in particular, the role of the state in promoting economic growth while maintaining equity through appropriate public policy.

The symposium featured several eminent leaders of Africa as panelists: H. E. Kikwete, President of the United Republic of Tanzania and Chairman of the African Union, H. E. Meles, Prime Minister of the Federal Republic of Ethiopia, H. E. Chissano, former president of the Republic of Mozambique, and Dr. Kaberuka, President of the African Development Bank Group. Professor Stiglitz of Columbia University also joined the discussion via a video message. I served as the moderator.

The following represent some of the salient points of the discussion in the symposium.

Certainly Africa is growing; but the challenge now is how to sustain an accelerated growth. For this purpose Africa needs to have an appropriate development strategy where the government is given more policy space to design a practical strategy that suits its respective unique situations. The message from Professor Stiglitz emphasized the relevance of Asian lessons in getting the right balance between the state and the market. The panelists all noted that Africa needs to learn from the Asian experience in its search for the appropriate role of the state in addressing market failure and promoting investment in infrastructure and technological capacity building.

This is not to mean that the government should interfere and replace the market. The panelists fully recognized the important role of the private sector, as being the driving force of economic growth. In this connection, Africa needs to develop a strong public-private partnership to further promote private sector-led economy under the stable macro economic environment.

Equally important was the observation that the benefits of growth should be shared across the society at large and that the process must be participatory and inclusive to make the growth sustainable. Furthermore, they all agreed that governance did matter: Africa needs to have quality bureaucracies and strong and good leadership, to ensure the stability of the economic system and to offer predictability to private investors.

Other important messages include:

  • Agriculture needs to be transformed and its productivity improved through the increased use of fertilizer and investment in infrastructure;
  • Trade must be promoted as countries in Asia prospered by pursuing export-oriented industrialization; and for this purpose market access of African products needs to be improved.

In order to support Africa's effort to sustain and accelerate growth, it was urged by the panelists that donors, including Japan, need to increase aid flows to Africa to lessen resource constraints of the African governments to pursue activist economic policy as well as to make massive investment in infrastructure and human resource development.

The Panelists also noted the following points in response to the questions from the floor:

  • State intervention in the economy should be pursued in such a way as not to stifle the private sector activities: sometimes the state can make mistaken decisions but that should not deter the state from pursuing an activist policy;
  • Japanese private sector should become more aggressive in exploring possibilities for expanding trade with and investment in Africa as it offers a large potential market for Japanese products;
  • Japan should take an 'enlightened self-interest' point of view in looking at its aid to and business in Africa: it is a long-term investment whereby Japan can benefit from the development of Africa.

The symposium ended with closing remarks by the moderator to the effect that Africa should continue to strive for solid and steady growth; and Africa and Asia should strengthen their mutual learning process through enhanced policy dialogue between the two regions.


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