Stability
and Good Governance: Preconditions for Development
Speech to Board of Directors, North-South
Institute
By David Kilgour, Secretary of State (Latin
America & Africa)
May 13, 1998
It is a pleasure
to be here today with people at the forefront
of development issues. We owe a great debt
to the North-South Institute for its insights,
research and publications. You should be
applauded for keeping development issues
in our public dialogue. Hopefully, my comments
today will contribute in some way to your
discussions.
The lack
of consensus about the meaning of the word
"development" is often striking.
Some express it in terms of economic progress;
others in terms of some notion of "modernity";
and still others in terms of harder-to-define
measurements of quality of life. All too
often, there is a tendency to treat economic
and political development as separate compartments,
requiring different preconditions.
As an elected
person with a background in economics –
not something I usually admit in public
– and now as I travel in Africa and
Latin America as Secretary of State, I’m
constantly aware of the interplay between
the political and economic spheres. Recent
visits to Africa and Latin America have
underlined the importance of getting the
politics right before we can even say: "It’s
the economy – stupid." Equally,
growth and stability in economies gives
breathing room for democratic practices
to take root.
Canada in
the World
Our government’s statement on foreign
policy a few years ago, Canada in the World,
cites as a key objective the promotion of
global peace as a central element of our
foreign policy. To quote: "Stability
and security are prerequisites for economic
growth and development." If these are
prerequisites, and they surely are, any
discussion of development must address as
its starting point the promotion of peace,
democratic development and good governance.
Without these three ingredients, no amount
of foreign aid, no matter how carefully
spent, can ever achieve "development."
No matter how we define it, development
can only be built on a foundation of political
stability.
In his recent
report to the Security Council on the causes
of conflict in Africa, UN Secretary General
Kofi Annan pointed out that since 1970 Africa
has had more than 30 wars fought on its
territory. Most of these have been intra-state
in origin. Fourteen of Africa’s 53
countries faced armed conflicts in 1996
alone. Annan concludes that peace and development
are inextricably linked – "one
feeding the other, enabling the other, and
securing the other." I couldn’t
agree more.
To quote
the Secretary General again: "Good
governance – ensuring respect for human
rights and the rule of law, strengthening
democratization and promoting transparency
and capability in public administration
– is now more than ever the condition
for the success of both peace and development.
Indeed, it is not a coincidence that Africa’s
renaissance has come at a time when new
and more democratic forms of government
have begun to emerge and take root."
In my own
travels in Africa, the complex relationship
between stability, good governance and economic
development has been abundantly apparent.
There is a spectrum of circumstances, ranging
from the war-torn and ungovernable to the
vibrant and thriving, and everything in
between.
Uganda on
an upswing
Last September, I visited Uganda, Rwanda
and Kenya. Uganda is a prototypical example
of a country with tremendous advantages
at the time of independence – a well-educated
population, fertile land, and relatively
good infrastructure. Through problems of
civil discord and bad governance –
at their worst under the dictatorship of
Idi Amin – it sank to unimaginable
levels in what became a vicious cycle. Many
of the more educated Ugandans fled the country,
the modern economy imploded, and infrastructure
collapsed. For years Uganda remained in
its downward spiral.
By the time
of my visit in fall 1997, Uganda had come
out of that spiral and was on an upswing.
Although President Yoweri Kaguta Museveni
came to power as the result of an armed
struggle a decade earlier, he has made enormous
strides in restoring good governance. Stability
was restored with the ending of civil war;
the administration was cleaned up. The economy
has been liberalized and opened to foreign
investment, including a sizable involvement
by the expatriate Ismaili community in Canada.
This has
paid off in economic success. Uganda has
experienced strong growth rates since Museveni
came to power – averaging six per cent
prior to 1994, and rising to eight per cent
and higher since then. Fully 2,000 international
companies reportedly have moved in during
recent years. Uganda remains one of the
world’s poorest countries, but with
sensible government policies it is moving
briskly in a better direction.
In terms
of democratic development, Uganda has not
yet embraced the Western ideal of a multiparty
government, and maybe this is not even Museveni’s
goal. He hasn’t muzzled the opposition
either. He has, however, moved forward with
a consensual model that allows expression
of direct dissent and incidentally allocates
five parliamentary seats for representatives
of the disabled. Though Uganda has a long
way to go, there is much cause for optimism.
Rwanda still
lacks peace
My next stop, Rwanda, has experienced horrendous
civil war and genocide. It now has a government
that has stated its commitment to good governance,
human rights, democratic development and
perhaps most important of all, reconciliation
and justice. But its way forward is obstructed
by continuing civil war, and an unreconciled
population. The economy as a result remains
very poor and direct foreign investment
is not coming. Despite the generally good
intentions of the government, the lack of
peace is an obstacle to domestic and foreign
investment and economic development.
My final
destination on last September’s trip
was Kenya. That country has not experienced
violence on the scale of its neighbours,
but it has suffered much violence nonetheless.
Kenya recently underwent multiparty elections,
but it has experienced serious problems
of governance. I share with Kofi Annan the
belief that good governance is a major prerequisite
for economic development, and that Africans
must look beyond the colonial past for sources
and solutions for current problems. For
international and domestic business to be
attracted to an investment opportunity,
it must be assured the rules are fair and
transparent. Without these assurances, business
will go elsewhere. Unfortunately, Kenya
has missed out on many opportunities.
Sierra Leone
restores democratic rule
In March this year, I visited the western
part of the continent on a trip that combined
business development with a Commonwealth
ministers’ mission to deal with the
fragile political situation in Sierra Leone.
Only weeks earlier, that country saw the
return to office of President Tejan Kabbah,
who was elected in 1996, but ousted in a
May 1997 rebel coup. The Commonwealth visit
was intended to show support for the return
of the duly elected government.
Sierra Leone
was then an example of a collapsed state.
Its modern infrastructure was destroyed
and the country was ruled by warring factions.
These often used child soldiers, many coerced
into war by such groups as the senselessly
cruel Revolutionary United Front. All sides
fought over the wealth of the minerals –
diamonds – and the losers were the
people of Sierra Leone.
The return
of elected government is a positive sign,
but Sierra Leone’s administration and
infrastructure must be totally rebuilt and
all areas of the country pacified before
that country can hope to advance economically.
With so many opportunities elsewhere in
Africa, business will be hesitant to return
until there is more confidence of political
stability. Happily there is a precedent
for this. On the same trip, I saw how Mozambique,
which was in similar state of conflict,
has been rebuilding, reconciling, and is
again attracting outside investment. Former
enemies have abandoned guns and landmines
in favour of remarkably civil parliamentary
debate.
Guinea and
Togo are both countries with long-term Canadian
investment and positive relations with Canada.
But most investment has remained concentrated
in traditional sectors, such as resources,
rather than in sectors linked to a modernizing
nation such as telecommunications. While
these countries benefit from a relatively
tranquil political environment on the surface,
greater transparency and more participation
by civil society would result in an improved
climate for long-term development.
Three success
stories
The countries that gave me the greatest
sense of optimism were Côte d’Ivoire,
Ghana and Mali. Along with Senegal, Côte
d’Ivoire especially has benefited from
French investment since independence. Abidjan,
the economic capital, is often called "the
Manhattan of West Africa." Until recently,
French firms were overwhelmingly dominant,
but that has changed. Since the collapse
of commodity prices in the 1980s, there
have been structural reforms, and a growing
number of capable technocrats have come
to influence.
At the same
time, Côte d’Ivoire has turned
to other countries for investment, including,
to a growing extent, Canada. The country
has made great advances toward good governance,
and is moving in the direction of democratic
development. This forward thinking is paying
off in considerable economic development,
not only in traditional sectors, but in
modern sectors as well. In fact, Canadian
firms developed software and provided technical
expertise for the regional stock exchange
that is opening in Abidjan.
Ghana also
has been moving in a positive direction.
It represents one of the more interesting
experiments of a military government transforming
itself into a civilian one. President Jerry
Rawlings has made great strides in areas
of good governance and democratic development.
Ghana was also a pioneer in structural adjustment.
These factors – not by some fluke –
coincided with healthy economic growth.
Ghana has seen an inflow of foreign investment
– a lot of it from the United States,
but also from elsewhere, including Canada.
The case
of South Africa is well enough known that
I won’t add much except to say that
the "Mandela Miracle" has brought
political stability and reconciliation.
These were the missing ingredients in a
country that already had a sound infrastructure,
and this has again made South Africa attractive
to investment.
A desperately
poor country like Mali might not come first
to mind as one of the continent’s bright
spots. On the United Nations development
index, Mali ranks 171st of 175 countries.
As a dry Sahelian country, it has experienced
desertification from the advancing Sahara.
About 85 per cent of the population is illiterate.
At first glance, it faces every conceivable
development barrier.
But Mali
has a forward-looking government that came
to power democratically and has governed
well. President Alpha Oumar Konaré
has modernized the administration, cleaned
up laws and regulations, and implemented
progressive economic reforms. He has taken
initiatives to combat arms proliferation
and end the guerrilla warfare that long
disrupted Mali’s north. Steps are being
taken to privatize industries in the energy,
telecommunications and transport sectors,
and to attract foreign direct investment.
About 23 Canadian companies are currently
active in Mali, and mining, transportation
and water development provide many opportunities.
Certainly
Mali has a long way to go, but it is an
excellent example of a country that has
stabilized and brought in good governance
as preconditions to economic development.
These are certainly not the only preconditions,
but without them development – no matter
how we define it – cannot take hold.
Obviously other factors are essential to
nourish the virtuous cycle of development
– local credit, sound infrastructure,
investments in human capital, and access
to markets – to name just a few.
Canadian
contribution
Canada continues to be a major contributor
of aid to Africa, and that continent accounts
for 45 per cent of Canadian bilateral development
assistance and more than half our humanitarian
relief. We are at the forefront of debt
forgiveness on the continent. We recognize
though that there can be no sustainable
development without peace, security, democratic
development and good governance, and that
is why we are devoting more attention to
these areas. We believe in developing African
capacities, and so we have contributed $2.5
million in support of the OAU’s Mechanism
for Conflict Prevention, Management and
Resolution. Canada led a multinational force
to aid Great Lakes refugees in then eastern
Zaire. We are currently participating in
the MINURCA operation in the Central African
Republic. Our aid programs under CIDA have
recognized the importance of peacebuilding
and democratic development. I note in particular
the $10 million Peacebuilding Fund, which
is a joint initiative between Foreign Affairs
and CIDA. We know how important stability,
democratic institutions and good governance
are to the successful development and ultimate
prosperity of the African continent.
My recent
travels have impressed me that there is
still considerable work to do. In that task,
your ideas and participation are most welcome.
It is also impressive, however, in many
of the countries visited, to see the progress
that has been made in recent years.
|
