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ECONOMIC DEVELOPMENT

A. Historical Hac_ond

8. In Africa socio-economic planning predates S&T planning and hence there is much more experience in the former than the latter. In the 1950s when Africa was largely under colonial rule, there was hardly any socio-economic development to boast of. Whatever development plans were formulated andimplemented naturally served the interests of colonial powers. In their earnest pursuit of "surplus extraction",the colonizers were preoccupied withthe development of large plantation and mining areas in the interior of many African countries in order to use the products as input for the burgeoning industries in Europe. In the process, cheap African labour was profusely used intheplantations and mines aswellas in developing the externally oriented physical infrastructure, such as, roads, railways and ports. Otherparts of the colonies which did not serve the interests of the metropolitan centres in Europe were left untouched, thus partly accounting for the present lop-sided development in many African countries.

9. It is to be noted that the colonial governments were totally against industrialization in Africa, even simple processing of the dominant export commodities was out of question. Thus, inthe 1950s most of Africa did not have any opportunity to develop a science and technology base. On the contrary, African export commodities were used to feed European industries and thereby expand science and technology in Europe.

10. It is only after gaining their independence that most African countries attempted to develop their economies by preparing com-prehensive socio-economic development policies and plans. Interna-tional financing institutions (multilateral as well as bilateral sources of finance) also made it conditional upon these countries to draw up socio-economic development plans if they were to be granted development finance.

11. It was much later that S&T policy-making and planning came to be appreciated as an integral part of the overall national development effort in Africa. Amongst the earliest African countries to have recognized the need for setting up national S&T policy-making and planning institutions within the framework of national development planning are Egypt(1948) and Ghana(1959). Between 1960and 1980, thanks to the active role played by the Organisation of African Unity

(OAU)~the UNECAand the specialized United Nations agencies, such as, UNESCO, UNIOO,UNCTAD andWIPO,a growing awareness and interest in S&T has been made possible in Africa, These institutions have been instrumental in advancing, popularizing and diffusing S&T in Africa.

12. In the case of Ethiopia, socio-economic development planning was initiated in the second half of the 1950s with the preparation of the first five-year national development plan. However, there was no specific reference in the plan document to S&T development other than indirect references to itin-the context of improving and expanding the educational system as well as the industrialization process in Ethiopia.

In fact, it was only in 1975 that the Ethiopian Science and Technology Commission (ESTC) was established by proclamation (Proclamation No. 62 of 1975) as an autonomous public body to formuJate national S&T policies and plans as well as to stimulate, encourage, finance and follow-up scientific and technological activities in the country. Despite this belated awareness of the important role that S&T can play in achieving development objectives, it was only much later in 1987that the ESTC could complete a draft S&T policy document. This first attempt was aimed at providing support to the implementation of the now defunct lOYear Perspective Plan of Ethiopia (1983/84-1992/92) prepared by the previous regime. With the demise of the regime in mid 199l , the plan was abrogated, and a new economic policy was announced by the present Transitional Government of Ethiopia. As a

result, a new national S&T policy has recently been drafted by the ESTC, and is now awaiting government approval.

B. Linkaees between SAT Policies and Economic Policies in Africa

13. In view of the above, the growing interest in the role of S&T as an important instrument policy affecting the course and pattern of socio-economic development has resulted in the creation of awareness to integrate S&T policy and plan in overall national socio-economic development in many African countries. This is not without any basis as can be evidenced from the fact that no nation has successfully developed without substantial improvement in its S&T capability. The objective of raising the quality of life of mankind thus requires massive investment in S&T resources. Africans are very much aware of this.

14. At this juncture, it may be rightly asked: What is the linkage between S&T and overall socio-economic development? Itis not really difficult to see the relationship between the two, if one can provide a suitable definition for the words science and technology. The definition that science is the "ordered arrangement of ascertained knowledge, including the methods by which such knowledge is extended and the criteria by which its truth is tested", and technology is "a body of knowledge that relates directly to the production or improvement of goods and services of whatever form to mankind"! gives a vivid relationship between S&T on the one hand, and development on the other. Whilst science helps us better to understand ourselves

and

our

environment, including the development process, technology relates to our ability to manipulate nature and its

surroundings-to

our advantage.

S&T also helps us to perform our tasks faster, easier and more cheaply thenif we used our own muscle power. Itis no wonder, therefore, that those countries that have developed their S&T capability have

attained

a very high stage of development, and those that have not have remained poor as is the case with most African countries.

15. Indeed, the linkage between policy-making and planning for S&T and for national development plans is so close and intimate that it is almost impossible to separate them. Development planning activities and the whole ~ange of economic activity involving the production of goods and services are intricately linkedwith S&T, e.g., in the sphere of technology selection, adaptation, development and application to the process of production. In national plans, it is always necessary to indicate physical targets and: investment allocations for each economic sector by setting out programmes and projects for which technological alternatives will have to be considered in order to enable choice of the most suitable alternative. In this respect, since it is obvious that S&T is at the heart of all productive activities and is of central importance to the process of growth, it cannot be considered as . an exogenous factor in the development process. Itis in fact part

and

parcel of development process.

1'6. The goals and objectives of socio-economic plans of African countries have striking similarities in their basic features, reflecting the fundamentally similar socio-economic conditions prevailing in these countries. Amongst the common development objectives that have relevance to S&T include:

(a) maximization of the growth rate of gross domestic product "(GDP);

(b) maximization of net national income;

(c) maximization of consumption;

(d) employment creation;

(e) redistribution of income and wealth;

(t) balanced regional development; and

17. These objectives cannot be achieved without any appreciable change in productivity levels for which S&T is crucial. This requires that S&T policies and plans areproperly formulated to help meet the national objectives. In this respect, one major objective ofS&Tpolicy would be progressively to enhance national capabilities in the selection, adaptation and development of technologies most suited to the objectives of socio..economic development.

18. The above basic objectives of economic policy have to be achieved through appropriate policy instruments, such as, fiscal, monetary, trade, manpower, financial and investment policies. It is to be noted that investment during a specific plan period is composed of a multitude of projects in the different sectors of the economy.

Without the execution of such projects, investment plans and hence basic objectives fOT economic growth will not be realized. Ifa project is defined as ..a complex economic activity

undertaken

to transform inputs into outputs the

value

of which exceeds

tbat

of the inputs", it is not difficult to understand that some form of technology is involved in the transformational process. In project preparation, engineering and technology evaluation is one of the most essential study aspects required to assess the viability of a project. In fact, most of the other study aspects, such as, financial, economic, social, environmental and organizational analyses, are made on the technology chosen after considering other alternative technologies. In this regard, the role of S&T as one of the most powerful instruments in achieving basic development objectives is clear. This requires that suitable S&T policies and plans be formulated.

19. The development objectives enumerated above may not always be mutually consistent or complementary. For example, objectives(a) and (c) seem to contradict each other as maximization of GDP growth rate would imply current sacrifices in terms of restraining current consumption. Similarly, objective (a) would appear at cross with

objective (g), because high GDP growth rate in Africa would require massive imports of foreign capitaland technology, leading to continued dependence on foreign technology which is in sharp contrast to the objective of building a self-reliant national economy. However, the long-term implications, which may be consistent with the objectives, are to be seriously considered. Be that as it may, the intimacy between S&T and socio-economic development can easily be established.

20. Employment creation is also often associated with the choice of labour-intensive techniques in project planning. So much so, in Africa there has been a growing interest in applying shadow wages (which are substantially lower than market wages) in the evaluation of investment projects as a method favouring labour-intensive technologies. Whilst employment creation~ is a basic objective of economic policy, it is sometimes considered as a means for realizing income distribution objectives (v).

21. From the above, it may be concluded that S&T and develop-ment arehighly inter-related. This requires that, in policy-making and planning, S&T policies and plans should correspond to socio-economic development policies and plans. The absence of any linkage between the two would not render any development plan tenable as goals and objectives would not be achieved.

22. In the case of Ethiopia, in spite of its glorious history of civilization in the cultural and the technical fields, it has, over the past few hundred years, fallen behind in the pursuit of S&T and has therefore suffered a severe social, economic and political decline.

Generallyspeaking, until the 1970s, no conscious and concerted efforts have been made either to improve the traditional technologies or to assimilate imported technologies. In the absence of S&T policies, large quantities of technology were being imported without any choice

commodities andcultural values of industrialized countries. Although

sincethe 1970s there

has been

a strong awareness of the important role

that S&T policies can play in socio-economic development,

their

implementation has lagged far behind.

m

IMPACT OF ECONOMIC POUCIES ON S" T CON-TRIBUTION TO SOCIo- ECONOMIC DEVELOPMENT

A. Genenl Overview of

Plannina

Practicesin Afriq

23.

Since

independence, most African

countries

have accumulated

a rich and diversified experience in planning. Almost all African countries have now planning structures and mechanisms. Despite the varied approaches, mechanisms and modalities adopted. for planning and implementation, generally the potential for local planning has increased substantially over the years. Available skills, particularly skilledmanpowerand technical expertiseinplanning,havethe potential to draw up fairly sound, rational andworkablenational socio-economic plans.

24. In the wake of independence, in most African countriesplanning

capacities,

viz., institutional framework, statistical mechanisms, skiIled manpower, etc. were virtually non-existent. Dueto this handicap, the first plans were prepared largely by foreign technical assistance, including research firms, free lance experts, bilateral assistance teams,

and

missions

of

international

financing

institutions,

supported

by local personnel. The foreign expertshad in most cases,verylittle knowledge about African development

problems,

and the indigenous personnel

were

young and inexperienced. Depending on the political whims and

inclinations

of African leaders, the plans were either indicative or imperative. Whilst the plans formulated in this fashion

can

be

considered comprehensive, their formal framework was limited to securingcoherence between investment objectives and domesticand external resources. Inadequate

economic

policies coupled

with

lack of coordination at the planning and implementation phases were some of the major problems encountered.

2S. Over time, the institutional framework wasgraduallyreinforced withskilledmanpower and resources, and new planning agencies were created. As a result, there was a marked development of planning methodswithindigenous planners becoming more conversantwiththe techniques. Despite this, however, dependence on foreign technical experts or financial institutions to prepare plans continued. The problem of coordination persisted and the involvement of the private sector in the planning and implementation processesremainedmarginal.

Under the circumstance, sound economic policies could not be formulated.

26. The 1980s were disastrous years for Africa. In terms of economic performance, the record was extremely disappointing.

Between 1980 and 1989, per capitaincome declined

by

1.7 percent, gross fixed capital formation fell by 1.9 percent, import and export volumes shrank by 2.7 percent and 3 percent respectively, and commodity prices dropped by 3.1 percent. In the meantime, unemploy-ment quadrupled, and debt burden doubled reaching US $256 billion.

The reasons for this poor state of affair are both endogenous and exogenous. Among the internal factors are unstable political situations, natural disasters including droughts, floods, famine and desertification, high population growth, low returns on existing investments, low productivityof labour, poor performanceofpublicenterprises, and an over-dominant position of the state in the development process with inadequate involvement and motivation of entrepreneurial forces.

Among the external factors are the world recessionary conditions,

of official development

assistance in

real terms.

This situation

has

unfortunately continued unabated into the

19908.

27. In view of the above, most African countries have

been preoccupied

with

short-term

crisis

management,

and

have

thus abandoned any pretence of planning. Against such a backdrop, many African countries attempted to undertake relevant

economic _

policy

reforms and programmes. These included Africa's PriorityProgramme

for Economic Recovery 1986-1990 (APPER) adopted by the OAU in 1985, and

the United

Nations

Programme

of

Action for African Economic

Recovery and

Development

1986-1990 (UN..PAAERD) adopted by the UN General Assembly in 1986. Further, since 1980, an

increasing number

of

African countries (some 3S of them

by

1990) have

adopted. structural

adjustment programmes (SAPs)

sponsored by the World Bank and the International Monetary Fund (IMF). Since

economic recovery is the basic

objective

of

all these

programmes,

long-term

objectives are not addressed.

28. In the absence of

long-term.

socio-economic plans and in the face of wrong

economic

polices, whatever S & T

policies

and plans might have been drafted could not have any meaningful impact on development. Anyattempt at designing a solution to Africa's problem of underdevelopment should examine carefully its economic

structure.

B.

Strnctnral

Deftdendea of

the

African

Economy

29. The most fundamental causes of Africa's

economic

problems can be traced

back to its weak structure as reflected in:

(a) The

predominance

of

subsistence and commercial