cracies and the desirability or otherwise of encouraging industrialization in primarily agrarian economies. Besides, the dialogue which was conducted between African poor nations and the world's multilateral and private lenders was supported by "leveraoe"-conditionally, implied threat of boycott and orchestrated excommunication. "
18. However, the search for an African perspective on development required first
the choice of an appropriate and relevant theoretical framework for the pursuit of econo mic growth and income distribution, and second, understanding the historical perspective concerning development issues. It was to be noted in that connection that structural changes were slow and rather disruptive and expensive processes. Therefore, the d.scussion of structural adjustment could not be isolated from the discussion ofdevelopment strategies.
19. He outlined the history of ideas influencing the thinking on development issues
and reviewed some of the most glaring areas of disagreement on structural adjustment issues. He pointed out the relevance of the classical economic perspective and re-aff.rmed fixed capital - which went hand in hand with technological progress as the engine of economic growth. Industrialization was therefore a logical sequel to capital accumulation and so also was regional integration as recognized in the Lagos Plan of Action. However, the primacy of industrialization did not imply neglect of other sectors particularly agriculture. He noted the "fallacy of composition" in the urge for all countries to accelerate the production and export of the same commodities and explained that the expansion of traditional exports by all economies of the region risked a fall in world prices. He was of the opinion that it was an error to blame Africa's loss of its share of the world market on currency overevaluation since there were other non-pnce factors which had been at work. In that connection, it should be noted that theU A/S-I1/14, annex I.
The wildABCaenTted DeVe'°Pment '" -b-Saharan Africa: An Agenda for Action. „„,
protectionist policies of the developed countries had been qu.te g r, . *ml£J*
farmer subsidies had been increased in both the EEC countries and the United States of America and export diversification had not helped the African countries either Further, despite the tariff reductions in the Tokyo Round, tariff protection aga nst agricultural commodities had increased progressively with the degree of processing.
Exchange rate depreciation was no panacea either as it risked repeated market destabilization as well as a reduction in the utilization of existing industrial capacity, and could therefore choke off further industrial growth.
20. Comrade Mersie noted the consensus which was emerging between donors and recipients, and pointed out that the World Bank had conceded that structural adjustment required time and that it was essentially a medium-term programme. However, it was clear that in the short term, most African countries were in a precarious position as measured by their level of international reserves in terms of months of import coverage, and therefore required more assistance in the form of debt write-offs and increased donor assistance. Instead, net resource flows had actually declined by 5 per cent in real terms in the period 1980-1985. Besides, most adjustment loans had tranche release delayed just as project finance was delayed due to policy-related conditionally. The adherence to conditionality thus defeated the very objectives of structural adjustment loans. He nevertheless cautioned that given the convergence of ideas on several points of detail in structural adjustment programmes, one had to resist any hardening of atti
tudes.
21. He demonstrated that sub-Saharan Africa had suffered greater and increased conditionality on its core sectors of agriculture, industry, public enterprises and trade at the cost of lessening control over economic policy.
22. He concluded by emphasizing that regional integration provided the most effective way of expanding markets and pointed nut inter alia, the need and urgency for a case-by-case approach to such issues as the economic impact of shifts in exchange rates, agricultural and industrial policies, and protective tariffs. Finally, he stressed that whatever the precise dimensions of public sector reform, the State would continue to play an important role in determining and diverting the development agenda.
23. The Executive Secretary of ECA welcomed the participants and extended sincere gratitude to Comrade Mersie Ejigu, the representative of the Government and people of Ethiopia, for his opening statement. He paid homage to His Excellency Comrade Mengistu Haile-Mariam, General Secretary of the Central Committee of the Workers1 Party of Ethiopia, Commander-in-Chief of the Revolutionary Armed Forces of Socialist Ethiopia and President of the People's Democratic Republic of Ethiopia and through him to the people of Ethiopia whose long-standing support and dedication to the Commis
sion had continued to stand it in good stead.
24. The present meeting was important in many ways. It marked Africa's crossing of the bridge between the tumultuous decade of the 1980s to that of the 1990s leading to the start of a new millennium. The meeting was taking place after the mid-term review of the United Nations Programme of Action for African Economic Recovery and Development (UN-PAAERD) and Africa's Priority Programme for Economic Recovery (APPER) by the General Assembly of the United Nations. It was also the first time that Africa was undertaking a collective search for an African Alternative to Structural Adjustment Programmes (AA-SAP) - the theme of the meeting.
25. The Executive Secretary focused attention on Africa's recent performance as evidenced in the outcome of the mid-term review of the-UN-PAAERD and APPER as well as in the Economic Report on Africa, 1989. The mid-term review had led to a useful consensus on the salient features of both the assessment of the implementation of the
UN-PAAERD and the required future actions which provided an important backqround
to the theme of the present meeting.
26. The review of the implementation of the UN-PAAERD had revealed that the average performance of the African economies had remained unsatisfactory. That poor performance had been fully substantiated by the information available for the period 1986-1987 in the Report of the Secretary-General on the mid-term review.
27. Regarding policy reforms, the mid-term review had shown that the experience of African countries in the implementation of stabilization or structural adjustment programmes had revealed substantial concerns not only to African Governments but also to bilateral donors, multilateral financial institutions and non-governmental organiza tions. Disturbing trends had also been discerned in the response of the international community in supporting the UN-PAAERD. A certain degree of "donor fatigue" had, for instance, become increasingly more perceptible and there had been increasing and enhanced levels of conditionally on the strict adherence of African countries to World Bank- and IMF-sponsored structural adjustment programmes.
28. The Economic Report on Africa, 1989 had shown that the overall performance of the African region in 1988 had been significantly better than that in !987 although the upswing had not been strong enough to halt the decline in per capita output and the average level of purchasing power had been further adversely affected by rising rates of inflation. Exceptionally good weather conditions and a sustained increase in metal prices, especially copper, had been the two most important factors behind the growth rebound in 1988. The Executive Secretary emphasized, however, that the region as a whole had not benefitted as much as other developing countries had done from the recovery of and buoyant markets in the industrialized countries. Demand for Africa's exports had remained weak. The burden of debt had continued to thwart efforts at maintaining high economic growth at the same time as negative resource flows com pounded the recovery problems. The recovery in agriculture had been hardly region-wide and the food situation had remained precarious. Prospects for 1989 were most uncertain, predicated as they were on the most unpredictable parameters such as the out-turn of the weather and unstable external factors.
29. The Executive Secretary briefed the Committee on the motivations that had led the secretariat to embark on a study on an African Alternative to Structural Adjustment Programmes, the general thrust of the findings of that study, its conclusions and recom
mendations.
30. The study had been initiated against the background of the growing dissatisfaction with the theoretical and empirical inadequacy of the World Bank- and IMF-sponsored orthodox structural adjustment programmes that the majority of African countries were undertaking. The ECA secretariat had also been greatly encouraged in that regard by the urgings of the international community as represented by the General Assembly and as reflected in its conclusions on the mid-term review of the UN-PAAERD.
31. He said that the study had greatly benefitted from the financial support of UNDP and, in that connection, he thanked UNDP and particularly its Assistant Administrator and Regional Director for Africa for that organization's dedication and support to the cause of the betterment of Africa. The study had evolved through a process of consulta tions and consensus building involving an International Advisory Board composed of 20 eminent African and non-African personalities including senior officials of UNDP, the World Bank and the IMF; the use of general and specific case studies prepared by a total of 25 national consultants and several African economists who had met in a workshop organized by ECA from 2 to 5 January 1989 to consider the preliminary findings and conclusions of the study. The draft findings and conclusions of the study had been
reviewed bv the Conference of African Ministers of Finance at its third meeting held at Blantyre, Malawi, from 6 to 8 March 1989. The conclusions of that meeting, which were embodied in the Blantyre Statement, had been used to revise the study into the form in which it was being submitted to the meeting of TEPCOW.
32. The findings and conclusions of the study in general showed that the design, imple mentation and monitoring of conventional stabilization and structural adjustment pro grammes had had serious implications which cut across the political, social and economic spheres. The programmes had often implied an erosion of national sovereignty. They had ignored the human dimension and had tended to worsen the well-being of large cate gories of the population. The standard monetarist approach of the programmes, with its related classical instruments of money supply control, credit squeeze and exchange and interest ra.te adjustments, had only served as a temporary palliative for the symptoms of the more deep-seated structural imbalances of the African economies. The programmes had, moreover, failed in their limited objectives since many of the sub-Saharan African countries implementing them had experienced a deterioration in investment ratios, budget deficits, debt-service ratios and overall GDP growth. Similarly, the sustainability of the programmes had been undermined by the inadequacy of the inflow of non-autonomous resources which they were expected to generate in the first
instance.
33. The Executive Secretary maintained that all these findings were consistent with the World Bank's own conclusions resulting from its own assessment of the programmes in 1988. The need for adjustment was nonetheless unquestionable. What was imperative was a structural adjustment process with built-in and fully integrated transformation processes. And it was in that connection that the proposals of the study were made.
He went on to outline the proposals which were in three interrelated parts, namely (i) the macro-framework of adjustment with transformation; (ii) policy directions, instru ments and measures to operationalize the framework; and (iii) implementation strategies and effective monitoring of programmes of adjustments with transformation.
34. He then referred to the relevance and significance of the central theme of the meeting and to the various other issues, studies and reports as well as the recommendations of the subsidiary bodies of the Commission that had been brought up for the consideration of the Committee. He highlighted, in particular, the role of the Commission's MULPOCs; the need for cogent and practical policy recommendations for the further development of the food and agricultural sector; the need for a sound basis for the preparation and launching of arrangements for a possible follow-up to the programme for the Industrial Development Decade for Africa; the preparation of the second United Nations Transport and Communications Decade in Africa (UNTACDA II); the recommendations of the Blantyre meeting of the Conference of African Ministers of Finance on the questions of domestic and external resources management; external debt management and the establishment of the African Monetary Fund; and the need to incorporate the social dimensions of economic change in the
recovery and adjustment with transformation process.
35. The Executive Secretary said that 1989 was an important programming year. In that connection, he drew the attention of the Committee to the programme budget for the biennium 1990-1991 and the preparation of the next Medium-term Plan, 1992-1997. He then referred to the International Development Strategy for the fourth United Nations Development Decade which was expected to be adopted in 1990 by the General Assembly of the United Nations. He also informed the Committee that the General Assembly had decided to hold a special session in April 1990 devoted to international co-operation with special emphasis on revitalization of the economic growth of the developing countries. With regard to the Medium-term Plan, he proposed that in the
light of the difficulties the secretariat had encountered in getting the proposals ready for consideration by the Conference of Ministers, an open-ended ad hoc committee consisting of members of the bureau as core, should be set up to meet later that year and make recommendations to the Secretary-General on behalf of the Commission.
With respect to the International Development Strategy for the fourth United Nations Development Decade, he informed the meeting that the Commission was expected to make inputs into the work of the_ad_uflc_committee which had been established to prepare the draft. On the proposed special session, he urged member States to participate at
the highest policy-making level.
36. The Pledging Conference for the United Nations Trust Fund for African Development (UNTFAD) was a major event of the current session of the Commission.
The Executive Secretary accordingly urged member States to replenish the Fund to enable the secretariat to carry out its expanded operational activities.
37. It was the tenth anniversary of TEPCOW, just as it was the tenth anniversary of the Africa Regional Co-ordinating Committee for the Integration of Women in Development. The Executive Secretary wished both Committees we!!. He referred with a sense of history to the many occasions TEPCOW and the ECA Conference of Ministers had had cause to defend African interests and integrity against various forms of blackmail and subterfuges. ECA had no silver and gold and no loans or credit to offer; but it had the power of ideas which was more potent than all those put together.
He had no doubt that TEPCOW would once again generate that power in defence of the African Alternative to Structural Adjustment Programmes.
38. Speaking on behalf of the outgoing Chairman of TEPCOW, the representative of the Niger expressed gratitude to the Party, Government and people of Ethiopia for their generous hospitality. He congratulated the Executive Secretary of ECA and his colleagues for their dynamism in defending the interests of Africa. He observed that the tenth meeting of TEPCOW was an occasion to take stock of what had been achieved since its last meeting and to make appropriate recommendations.
39. It was high time that Africans looked in greatest detail into the ills besetting their economies. Solutions had to be found if African economies were to emerge from their current stagnation. Stabilization and structural adjustment programmes had been implemented but the results of those experiments had fallen short of the hopes on which they had been formulated. Thed igain, and most unfortunately, African economies were
tragically performing badly.
40. In view of that bitter reality, the current session would have, among other things, to consider the study on an African Alternative to Structural Adjustment Programmes.
That study should be considered most meticulously in order to find an alternative more adapted to the economic, social and political realities of the African countries than were the traditional structural adjustment programmes which had failed in most African
countries.
41. The current session would also consider matters relating to intra-African co-operation and to the integration of the economies of various African countries which was the only means of strengthening Africa's position in the world economy. African countries had a wide range of natural resources which needed to be exploited and properly managed as the continent was regularly hit by natural disasters. He requested the Committee to accord special attention to PADIS and to see to it that the African Centre of Meteorological Applications for Development (ACMAD) project was strengthened.