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Le Bouder Jean-Pierre - 9 luglio 1991
Structural Adjustment, Good Governance and Democracy

Remarks Delivered by Jean-Pierre Le Bouder

at the North-South Roundtable on African Debt Relief, Recovery and Democracy

Co-sponsors: Parlamentarians for Global Action The African Development Bank

8-9 July, 1991

African Development Bank Headquarters

Abidjan, Côte d'Ivoire

INTRODUCTION

It is indeed an honor and a pleasure to address this Nord-South Roundtable on African Debt Relief, Recovery, and Democracy. We must commend Parlamentarians for Global Action, the African Development Bank, and the co-chairs of this meeting, Drs. Chidzero and N'Diaye, for their vision in organizing this unprecedented dialogue.

I also welcome ths opportunity to share with you some of my personal views on the important issues on your agenda. And let me stress at the outset that these views do not necessarily represent the view of the countries I represent, or the view of the World Bank.

The Nature of Structural Adjustment

Africa is in danger of becoming a forgotten continent. I do not say this lightly. Events elsewhere in the world (reconstruction in the Gulf, reform in the Soviet Union, and the integration of Eastern Europe into an international market economy) oreoccupy the world's attention, and its resources. Today, the African continent continues to face a crisis of debt,of economic stagnation. Linving standards have fallen dramatically, and public infrastructure is crumbling. And yet today (despite the efforts of the Special Program of Assistance, and the Enhanced Structural Adjustment Facility, and various debt relief efforts) net transfers to Africa remain negative. We are paying to the North more than we receive in now loans, grants, or investment.

How can we put Africa back to the top of the development agenda?

The key issue, I believe, will be economic potential. Africa needs to be seen by the rest of the world as a partner, not as a burden. Partnership involves dignity, not dependency; mutual benefit, not charity. With the ending of the Cold War, and the disappearance of geostrategic imperatives, small, weak countries count on the world's agenda primarily on the basis of how they manage their economies, their resources, including their human resources, their vision of their own future. This is the strategic imperative for Africa in the 21st century: economic and political reform, recovery, international competitiveness.

How do we get there?

Structural adjustment is a beginning. More than ten years of experience with economic policy reform in Africa make it clear that structural adjustment is not something temporary. The essential content of these changes (for example setting realistic exchange rates, cutting government deficits, lowering trade barriers, and removing the many layers of regulations and red tape that often drove enterprises into the informal sector) we should regard as permanent. We are deeply in need of economic systems that reward performance, not personal connections. In some of the countries most battered by economic crisis, adjustment reforms have ended a downward spiral and begun a genuine economic recovery. And yet in many countries, the stalemate of stop-and-go reform persists. It is clear that more attention needs to be paid, not just to the content, but to the process of reform.

Our workshop today is entitled "Good Governance, Democracy ad Popular Participation in Africa: The Role of Parlamentarians".

To be sustainable, economic policy reforms must be rooted in a national consensus. These decisions must be taken by those who are responsible to their people for the welfare of the nation, by leader who are trusted, not feared.

It should come as no revelation to you, a room full of parlamentarians, when I stress that the process of structural adjustment is always a deeply political process, with winners and losers who struggle over each change in "who got what, when and how". We need a deeper recognition of economic policy reform as a political process. And we need to consider its relations with governance, democracy and popular participation.

The Nature of Good Governance

Governance has been defined broadly as the exercise of political authority and control over a society, and the management of its resources. Good governance can be seen as a process leading to outcomes of social justice and economic development. But what are the means to these ends? To start with, good governance in its broad sense can only be based, in my judgement, on legitimacy, on a system supported by the majority of citizens, who see it as reflecting their best interests.

This legitimacy will be marked by an established rule of law that underpins predictability and establishes due process, by procedures that ensure accuntability ef government officials to the public, by adherence to professional standards, by a genuine commitment to broad-based, and equitable, economic progress, by the tolerance of diversity and by respect for human rights.

We should be aware, however, that international financial institutions such as the World Bank, for perfectly valid reasons related to their respective mandates and Articles of Agreement, see good governance in a much narrower sense, limited to the need for rules and institutions that support transparency and financial accountability, adherence to the rule of law that establishes predictability, and the free flow of economic information.

Good governance, economic growth, and democracy develop differently in different parts of the world. When economic growth is underway, when the pie is continually expanding, citizens may remain content with a paternalistic government. They may accept the piece of pie allocated to them by government. They may not demand accountability; they may not call for political participation.

But when the pie is shrinking, when painful belt-tightening is called for, rumbles of discontent can shake a rigid system, a system not used to listening to citizens as it makes decisions that affect their lives. Governance under these painful conditions of scarcity, of economic change, requires more than ever that citizens be part of the decisions that so affect their lives. It require channels to continuously communicate citizen's demands to government, government information to citizens, and to include citizen's feedback into policy decisions. It requires building national consensus behind a national path of reform. It requires a system that has the trust of the people, a system founded on institutions rooted in local culture and experience, a system with the checks and balances that reinforce legitimate leadership, and the protection of individual and group rights.

By this, I mean clearly that freedoms of assembly, of expression, of information, and the right to due process must be protected under the law. I may go further and say that it is no accident that so many nations have grown to see governamental legitimacy as embedded in a constitution that enshrines the right of people to participate in political decisions.

We are speaking here of a democratic system, one in which the basic institutions essential to democracy are solidly in place, a system with a parliament that represents the voice of the people, with an independent judiciary that guarantees an impartial rule of law, a separation of power that provides the critical checks and balances that give stabiity to the system and yet allow it to accomodate a plurality of interests.

Costs of democracy ?

In these times of economic crisis, some voices argue that authoritarian leadership is necessary in order to make the difficult decisions that will guide our nations out of poverty. This is far from the truth. It may seem that young democracies are slower to make policy decisions.

Pluralism guarantees that many voices will be heard. The process of airing bitter issues from the past will also take time and may distract parliaments and people from the difficult decisions for the future. There is no guarantee that democracy result in faster economic growt, or even that it is correlated with economic growth at all in the short term. And democracies can produce crude populism and political paralysis, when leaders opt for short term popular gains over the difficult decisions that are sometimes necessary for long term sustainable development.

And yet, as the experiences of the rapidly growing societies of South Korea and Taiwan, as well as the older industrialized nations of the North have shown us, to sustain economic growth may require an open political system.

South Korean, and Taiwanese citizens have recently demanded -and received- a larger political space, multiple party elections, and the protection of political rights. On our own continent, Botswana and Mauritius (both with well-established democracies) have also achieved much on the socio-economic front, with life expectancy among the highest in Africa, and sustained economic growth even over the difficult past decade.

A POLITICAL ACTION PLAN

Democracy must grow from local roots; it cannot be imported, sold, or paid for. It cannot be imposed from outside. The people of each nation must take their fate into their owm hands and shape the form of government most suited to their national aspirations. Democracy -if that is their choice- must be nurtured, if necessary, with the blood, sweat and tears of a nation's own citizens.

What role do international agencies have in this process? To start with, these are international issues. Values of popular participation and of human rights know no boundaries; these are values of universal importance. The United Nations Declaration on Human Rights is universally accepted, and most African nations have signed the African Charter of Human and Peoples Rights.

In addition, I believe that some international actors (bilateral development agencies in particular) do have a role, limited, but potentially of great importance.

First, these agencies are best placed to support ongoing change as determined by countries using democratic processes. Countries in the midst of these difficult transitions are particularly in need of positive reinforcement: through debt relief, for example. Additional funds should be pledged by bilateral agencies to assist these "poltical adjustments", such as the ongoing transitions in Benin, Côte d'Ivoire, and Mali. Let us look at this support as much more a matter of carrots than of sticks, of renforcing and rewarding promising trends, rather than of making continued foreign assistance "conditional" on a checklist of political changes. It will take skill to encourage genuine democratic transitions while not distorting the process through outside interferences.

These reforms may require a different expertise from those who wish to help. When newly opened parliaments call for help in building capacity of legislators to conduct policy research and analysis, for example, international assistance should be ready. When they ask for technical assistance in reforming outdated legal systems, or establishing an impartial and independent judiciary, expertise should be on tap.

Who should take the lead in this support? The multilateral finance institutions are not the best placed to respond to request for this type of assistance. On the other hand, bilateral governments linked through ties rooted in colonial relations may not be the most disinterested assistants. Of the bilaterals, special mention must go to these countries -such as the Nordics and the Netherlands- which have offered their expertise to Africa without the burden of special ties and obbligations rooted in a previous era. But their resources are clearly limited.

Perhaps it is time for more of a non-governmental approach, an approach like the one being co-sponsored today by the Parlamentarians for Global Action. Funding is only part of the need. Just as important is a commitment of human resources. Organizations of experienced professionals like this can provide the specific guidance needed by new democracies. Forces are scarce; let us put our weight together. For example, let me encourage joint ventures,such as a linkage between Parlamentarians for Global Action and the Global Coalition for Africa, the "GCA", which is designed to mobilize international support for African developmetn. I can envision the rise of other associations -an Association of Supreme Court Justice, for example- which could sponsor partnership and twinning arrangements between its members and new institutions in Africa.

Yearly cycles of funding are inadequate for processes which will take five, ten years... perhaps a generation. Friends of African democracy might think of endowments for building the healthy institutions necessary to support democracy: for example, endowing a foundation to publish government information - economic statistic, legal gazettes, draft constitutions, the budget, etc., or to establish a non-partisan, independent, policy think-tank.

In all cases, those involved in assisting this democratic transition must make a long term commitment. And we should not be afraid of failure. We must give ourselves permission to experiment, to try new paths. Accelerating democracy, like accelerating economic growth, is still an inexact science.

Promoting progress toward democracy and good governance

Not all of our nations have made a commitment to democracy, nor to good governance. Outside support has a role in these societies also. Development assistance can support a more healthy division of responsibility between the public, the private and the voluntary sectors. In the long term, good governance can evolve over time under pressure from varied domestic groups. This means support for an enabling environment that (1) will allow private sector production and investment to flourish, and that (2) will nourish the growth of institutional pluralism, particularly the representative nongovernmental associations that organize people to "reach up" to the government.

This will require, among other things, freedom of association for nongovernmental groups. To be effective, after all, popular participation needs to be channeled through associations that represent the interests of their members. Furthermore, participation will require ways and means of bringing government and nongovernmental groups -voluntary organizations, business associations, and others- together in dialogue over policy choice and implementation. It may mean building institutions -task forces, blue ribbon panels, and advisory committees- to serve as channels for the regular exchange of views. In the longer run, it requires basic literacy and numeracy, the underpinnings of effective citizenship. For effective citizenship involves duties and responsibilities -the payment of taxes, as one example- as well as rights.

Creating the preconditions for good governance also requires many of the reforms promoted under structural adjustment programs. Reducing government interventions in the economy creates new opportunities for wealth outside of the public sector. While encouraging foreign investment can provide needed resources for our natural development, they cannot hold the same commitment as an indigenous businessmen to a country's future. We have many prosperous traders in Africa, but few industrialists. Establishing stability, predictability and the rule of law will encourage our entrepreneurs to commit their capital to the longer term investments necessary for increased productivity and competitivences.

Finally, all parties concerned with Africa's plight must recognize that there is a moral dimension to development. Democracy, with its system of checks and balances, can help compensate for less than ideal leadership. But even in nations where most people can neither read nor write, they know right from wrong: this is why the people take to the streets when they cannot remove their leaders by the vote. It is the market women, the street vendors, the taxi drivers who provide the real force for change. We can do no less than to listen to what they say.

Stop financing abusive regimes but continue financing people's development

The civil wars in Somalia, Ethiopia, and Liberia bring home to us a deeper problem. How can international and bilateral agencies refrain from supporting dictators, and yet find ways to assist the people in authoritarian countries who suffer -often in silence- under appalling circumstances. To abandon the people of these countries to their oppression is to deliver a double blow. The real challenge is to assist the poor, and support basic human needs, while not propping up a tyrant. We must continue to support public health, nutrition, and education programs in these countries, as well as humanitarian aid, through appropriate channels including private relief organizations and the United Nations.

GLOBAL GOVERNANCE

Good governance on the national level must be supported by good global governance. Accountability, transparency, and the rule of law must govern international transactions also. The North could find that democracy and openness in Africa make its relations much more difficult: with a dictator, decisions can be made secretly, contracts signed and funds transferred with little or no public debate. These days are ending.

Debt and Governance.

Many of the most heavily indebted countries today are paying the price of unilateral decisions made by leaders who did not represent the people. The rule of international law -which provides a modicum of order in our sometimes troubled world- requires that these debts be paid, unless cancelled. But for the future, better governance and more popular participation may serve to reduce unwise investments.

Parliaments are not immune from funding white elephants, but as recent examples in the environmental field have shown us from Kenya, to Botswana, to Brazil, once organized, the power of the people to influence the design and implementation of projects which affect sustainable development as they see it, must be recognized and encouraged. More opportunities need to be opened for public consultation and participation in the preliminary identification and preparation of government projects.

Coming to terms with these new voices has not been easy for institutions like the World Bank. But transparency, openness, and "listening to the people" may help ensure that debt -when it is incurred- goes to projects and programs which people can point to later with satisfaction, and say "this is what our tax money has purchased".

Military spending

The Cold War is ending. With the real possibility of the end of apartheid in South Africa, there is no real reason why we should have armies in Africa, armies that have often acted as much as proxies for East-West conflicts, as for any real national purpose. Too often in Africa, military spending is a cover for favored treatment of military elites: plush housing, cars, etc.

In 1988 alone African governments spent more than 13 billion dollars on their militaries, funding that could feed, educate, and provide health care for much of the population.

The resources now used by the military can be transformed to productive uses. Use army barracks as centers for recruits to learn trades and skills for a modern economy. Instead of military advisors from our foreign friends, we should ask for the Army Corps of Engineers to train our soldiers to build bridges, become mechanics, reconstruct our countries.

It is true that military service can provide some experiences vital for nation building - it is a great leveller, promoting understanding between rich and poor, urban dwellers and farmers. I myself experienced this when I served in my country's army. But this same result can come from civic national service: mobilizing youth for reforestation, for building roads in remote villages.

Some have said that African rulers confuse their own security with that of their people. And yet at times, all nations feel threatened, sometimes with good reason. Collective security arrangements at the subregional level can serve to reduce tensions and remove the need for such high levels of military spending. The experience of ECOWAS in the Kiberian conflict represents a new attempt at regional peace keeping; we should study the lessons, for we have much to gain.

But here, as well, the North must ask itself some hard questions. Much of this military expenditure is urged on African governments by the world's major arms suppliers, with the support of their governments. Let us work together to convert this deathly trade into a trade that supports a better life. Urge on us not fighter jets but sturdy cross-country lorries to carry our harvests to market; not bullets, but miracle seeds; not swords, but ploughshares.

Corruption

Corruption is a severe problem in many of our countries. Some estimate -without evidence, of course- that if certain Swiss bank accounts were available for inspection, enough funds might be found to repay half to three-quarters of the foreign debt of particular countries. But international corruption, like wasteful projects, like military expenditure, is a two-way street. When a government official accepts a bribe to give a contract to company X, both are at fault.

Greater transparency in government spending decisions: in budgets, in procurement procedures, can fight the corrosion of corruption. But global action to support norms of openness and accountability in international transactions requires action on the part of all partners, not simply those in the South. Some have suggested the formation of an independent, international group along the lines of Amnesty International, to monitor corruption from both sides. I would support this idea.

CONCLUSION

I fully support a broad-based Political Action Plan for Africa. And yet many questions remain to be resolved.

Who should be doing what, how, and when? For our own nations, I urge that we explore ways to ensure that political parties represent all areas of a country, and not a narrow ethnic constituency. We must ensure the safety and security of all political actors; serving as a member of parliament, or as an opposition figure, should not be a life-risking position. Financial disclosure rules for office holders will reinforce norms of financial propriety. And finally, we must find ways to push for the participation of women as political candidates.

For bilateral agencies: Tailor aid in support of democracy in a positive manner which encourages this trend, not by further depriving oppressed people. Recognize, however, that this is a long term process and will demand long term commitments; the current short-term modes of assistance will need to change. Recognize that nurturing democracy will require different types of assistance, not only funding, but human resources, learning partnership and exchanges. The old models of closed decision making vis a vis foreign assistance need to change. Participation will require this.

To both donors and recipients, extend transparency to military expenditures, and include both sides of international arms sales in that openness. Remember that democracy helps to establish the rule of law and transparency not only in recipient countries but in donor countries as well.

Like the proverbial acorn and the oak three, great things can grow from small. A group of two or three of you who have internalized a political action plan in support of democracy and good governance in Africa can make a difference. You can plant these seeds in your own parlaments and congresses.

Finally, I must repeat something I said earlier: values of popular participation and of human rights know no boundaries; these are values of universal importance. I would say to those who want to support African development: express your most deeply held values through your aid. Support our efforts to establish good governance and democracy, social justice as well as economic development. Thank you.

 
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