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Speech Transcripts

May 8, 2013

Speech at the seminar co-organized by the Embassy of Japan in South Africa, JICA and Stellenbosch University: Changing Africa and Challenges for Japan

Southern Sun Waterfront, Cape Town, South Africa

President Tanaka's speech in Cape Town on May 8, 2013

Ladies and Gentlemen,

It is my great pleasure to be here in Cape Town to have this opportunity. Last February I came to South Africa but spent time only in Pretoria and Johannesburg. I am extremely happy to come to Cape Town tis this time, especially so because I love great wine.

I feel honored, too, because South Africa was the symbol of peaceful democratic transformation of the 20th century. Any student of politics should visit South Africa. It was a shame that my first visit to your country was this past February. But better late than never. I am quickly learning. In any case, I still remember the time when I wrote a book review of Mr. Nelson Mandela's Long Walk To Freedom, when its Japanese translation was published in 1996. It is good to hear that Mr. Mandela is now back home.

I feel honored, too, because South Africa was the country where a Japanese Prime Minister delivered a major speech on Africa. The Prime Minister was Mr. Yoshiro Mori. He was the first Japanese prime minister who visited Sub-Sahara Africa in January 2001. He announced that African renaissance was possible in the 21st century, and that, without resolving African problems, it would not be possible to ensure the stable and prosperous world in the 21st century.

Twelve years later from the Mr. Mori's speech, Africa is now growing. I am sure that his conviction was right and it has become a reality. Africa is much more important both for the world and Japan. JICA continues to contribute to accelerating the growth of Africa and tackling new challenges of the changing Africa and Japan.

But before talking about what JICA is doing in Africa, let me start with a fundamental question on the past performance of Africa's growth; "Why has Africa's growth been boosted since the beginning of the 21st century?"

One relatively simple answer is that it is due to the price hike of energy and mineral resources in the global market. A Japanese economist estimates that there has been a strong correlation between the oil price and the GDP (in nominal US dollars) of sub-Saharan Africa; the correlation coefficient is estimated 0.902 during the period from 1970 to 2007. This is a very simple and attractive answer to this question. However, it does not explain why the oil-importing countries are also growing strongly with an economic growth rate similar to oil-exporters. According to IMF estimate, the growth rate of oil-exporting countries in Sub-Saharan Africa is 6.0% ~ 7.1%, and that of oil-importing countries, except South Africa, is 5.8% ~ 6.0%.

It seems possible to answer that the oil-importing countries benefit the price hike of other export products. For example, the prices of agricultural commodities also have been on a strong upward trend since the early 2000s. However, with regard to a number of oil-importing countries, such as Burkina Faso, Ethiopia, Mali, Rwanda, Uganda, their terms of trade have been remaining stable or declining since the early 1990s. Although they have not benefited from export, they are growing strongly. I would like to add that all these countries are landlocked countries, which are broadly thought to be in unfavorable geographical conditions for growth.

IMF economists reported the most important factor for the fast growers in Sub-Saharan Africa has been a significant increase in total factor productivity. World Bank economists also estimated that the role of policy reforms undertaken since the 1990s had been the most important growth factor since the late 1990s. If their views are right, we can attribute Africa's growth not only to external factors, or "good lucks", but also to results of the efforts made by African governments and people. This is really an encouraging suggestion. Productivity growth and good governance were the keys.

On the other hand, we can find more cautious views such as Paul Collier's "four development traps". Paul Collier raised conflict trap, natural resource trap, landlocked with bad neighbors, and bad governance in a small country, as constraints for development in Africa. I agree with his arguments of the possibility of four traps. But given the current performance of Africa, we could be at least cautiously optimistic about the future of Africa. What we need to do is to find out how to avoid entrapment during the process of development. Now let me illustrate what Japan is doing in Africa.

First, we believe in the importance of human security. Japan supports African efforts for peace and stability currently in South Sudan, Democratic Republic of Congo, and next in Somalia and Sahel Region. Our support is mostly focused on peace building and reconstruction in post-conflict countries to help them promptly and seamlessly shift to development stage and to prevent them from entrapped into the "conflict trap". As Paul Collier suggests in his Bottom Billion, post-conflict situations are the times of highest risk; around half of all civil wars are post-conflict situations gone wrong, and the right kind of cooperation could be effective in raising the growth rate in these situations. It is also critical to support neighboring countries to avoid regional spillover risk of conflict.

Second, the natural resource trap, often called "resource curse", is becoming a major topic of development in Africa. As there exist several "exceptions" of resource curse such as South Africa and Botswana, we should learn from them. And we should make efforts to prevent new resource-rich countries from falling into this "trap". In Mozambique, JICA is supporting an agricultural development project in Nacala Corridor. JICA experts are working closely with their counterparts in Mozambique and Brazilian experts to increase agricultural productively, especially of smallholder farmers. By promoting the agricultural productivity, this project is expected to promote diversification and reduce volatility of Mozambique economy to external shocks. To prevent resource curse, eradication of corruption is essential.

Third, I believe regional and cross-border perspective is especially important in Africa. In TICADIV in 2008, regional infrastructure was highlighted as priority of its Action Plan and the upcoming TICADV is expected to further promote the scaled-up initiatives in the regional and continental levels such as the Program for Infrastructure Development in Africa (PIDA). In this context, JICA actively promotes regional transport network in southern Africa as Ambassador Yoshizawa already presented. We have financed Chirundu Bridge connecting Zambia and Zimbabwe over Zambezi River, and finances Kazungula Bridge which connects Zambia and Botswana. In the Nacala Corridor development in Mozambique I have just mentioned, the Nacala Port and road construction projects connecting Malawi and Zambia to the Indian Ocean are included. JICA supports regional transport network also in other sub-regions of the African continent.

Fourth, governance is critical. As Collier points out, there are serious limitations to what international cooperation can do to improve governance. Japan's approach to good governance is an eclectic one. We do not impose hard conditionality as a pre-requisite of international cooperation. On the other hand, we are not indifferent to governance conditions. Ours is a gradualist approach that emphasizes people-to-people dialogue and capacity building. Japan does not mechanically stop cooperation to a country with bad governance performer. Normally it continues in a lower level than before and areas that do not reward bad performers. But of course, here is a serious dilemma: cooperation with a government of poor governance may not be very effective. On the other hand, termination of cooperation with a government of poor government may push that country into more fragile conditions that may end up in a civil war or serious domestic violence. As Collier estimates the cost of a single failing state is around $100 billion. Ours is not a perfect approach. But we believe that calculated and small-scale continuation of cooperation on a limited number of areas could increase the prospect of increasing trust between us and the people of the partner country, especially when the governance performance turns to the better. We observe this phenomena in Myanmar now. During the time most countries in the West Terminated assistance to Myanmar, JICA kept Yangon office and conducted a few number of humanitarian cooperation. Now with the democratization, JICA office is able to expand our efforts of cooperation with cooperative counterparts in Myanmar.

In my view, the growth center of the world economy is now beginning to shift from the Pacific region to a much broader area which I call the Indo-Pacific region. In the Pacific region, Japan, the United States, China, and Korea are the current economic powers. When we see the Indian Ocean region, we find more new economic powers emerging whose potential are yet to be fully developed, South Africa, Mozambique, Tanzania, Kenya, Madagascar in addition to India, Bangladesh and Indonesia. As the Indo-Pacific becomes the broader region of economic dynamism, African countries will be much more important for Japan in the coming decades, as growing business partners with a huge potential market.

Obviously, we should not forget about serious challenges that Africa faces. I believe that what Japan has been doing is on the right track. I would like to lay out some of the principles needed. They may overlap what I have already said but I think repetition is better than omission.

The first principle is inclusive development. As I said, before, JICA has been emphasizing the importance of economic infrastructure but this is because we believe the right kind of infrastructure is critical in order to disseminate the fruits of growth to all segments of society. In agriculture, we emphasize the importance of including smallholder farmers in our projects. In education, we emphasize the importance of science and math for both boys and girls. In health, we emphasize the importance of hospital services clean and safe for mothers and babies.

The second principle is sustainable growth. Africa is in need of energy. The access to electricity is a huge challenge. On the other hand, Africa is rich in many sources of energy. We need to create a system where energy produced in Africa should be utilized in Africa. The energy consumption should be friendly to environment. JICA emphasizes the importance of renewable energy. Where applicable, geothermal power production has great potential in Africa. The solar power production is also attractive in many countries.

The third principle is good governance. Man shall not live by bread alone. People in growing Africa deserve better governance. Good governance is accelerator of further growth. I believe that the private sector is critical for the future growth of Africa. But the private sector prospers only where governance of political, economic and social system is effective.

The fourth principle is human security. Although the number of civil wars decreased in recent years, violence continues in several countries. There are many post-conflict countries where development cooperation in line with peace-building needs are desperately needed. Japan can support African efforts to promote peace and stability in Africa. JICA staff working very hard shoulder to shoulder with Japan's peace keepers in South Sudan. We focus on peace building efforts in post-conflict stage to help countries shift seamlessly from humanitarian relief stage to development stage, and to prevent them from returning back to conflict. It is also critical to support neighboring countries to avoid regional spillover risk of conflict.

Finally, Japan should promote business partnership between Africa and Japan. As the global growth center is shifting to the Indo-Pacific region, Japanese business community is focusing their eyes on Africa. JICA will continue to support Africa in enabling business environment and building infrastructure to promote private investment from Japan to Africa. In addition to business sector, other non-state actors such as civil societies, academics, artists, entertainers and athletes, etc. are also invited to jointly promote Africa-Japan partnership.

In 2010, when the Soccer World Cup took place here in South Africa, JICA, UNDP and Sony, a Japanese electronics maker, jointly organized the events of "Public-Viewing in Africa" in remote areas in Ghana and Cameroon, where people had no access to TV. This event also aimed at providing HIV/AIDS anti-infection measures and knowledge to the local populations gathering to the events in collaboration with a local NGO Ghana Family Planning Association. In total, 26 games were broadcasted by Public-Viewing, 24,000 people joined the events and 4,800 received HIV/AIDS health check.

In this event, JICA and UNDP provided their basis of operation in the country-level, the NGO provided its local network and know-how, and Sony provided its technology voluntarily. This episode of a joint project by mixed characters encourages us to further link Africa and Japan across the Indo-Pacific Oceans and strengthen ties between us through collaboration with more various stakeholders.

Thank you.

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