The Joint Declaration on Navigating the Shirting Tides of Globalization

[dRU]

Joint Declaration

Preamble

Africa?s economies are under severe challenge. The achievements of the past decade, which has seen robust economic growth, macroeconomic stability, and welcome progress in poverty reduction in a growing number of African countries, are now at risk as the world faces the gravest economic crisis in more than sixty years. Meeting in Dar es Salaam on March 10-11, 2009, African policy makers, development partners, the private sector, and civil society expressed a shared objective to ensure that the hard-won gains are preserved and the conditions for future progress are restored.

African Ministers and Governors underlined six building blocks of a stronger partnership between the Africa and the IMF: enhancing IMF surveillance over the policies of all its members, in a spirit of evenhandedness; expanding the IMF?s financing facilities and their accessibility to low-income countries; consolidating the debt relief process by adjusting the IMF?s debt sustainability framework to accommodate Africa?s new financing needs and opportunities; accelerating reforms of IMF governance to enhance Africa?s voice and representation at all levels of the institution; enhancing the policy dialogue between the IMF and its African members, including through technical assistance, to ensure that African countries? policies benefit from the IMF?s experience and expertise; and reinforcing the IMF?s catalytic role to leverage public and private financing for Africa?s critical infrastructure needs.

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1. We reaffirm that facing the global economic crisis requires strong partnerships. While it originated in the mature financial markets, the impact of the crisis is now global, requiring a global response. African policy makers are committed to sustaining sound economic policies and continuing to strengthen economic governance. Development partners need to increase their efforts to support Africa, including through aid, trade, and technical assistance. The private sector, in Africa and beyond, needs to seize the investment opportunities that represent the main engine for economic growth, employment creation, and poverty reduction in Africa. And the IMF needs both to bolster its financial resources and sharpen its surveillance over global financial markets.

Responsive And Timely Financing
2. Now more than ever, we must ensure that Africa?s financing needs are addressed. As the global crisis takes its toll, concessional support will be particularly important for helping countries to bolster their social safety nets and preserve fiscal space for vital development projects. Sustained economic development must also address Africa?s large infrastructure needs, by leveraging a quick and innovative revival of public and private sector financing. We call on Africa?s development partners to step up their support to assist Africa in these difficult times and ensure continued progress toward the Millennium Development Goals.

3. African members support the Managing Director?s call to double the IMF?s concessional resources and raise African countries? access to IMF financing urgently. Existing IMF financial facilities have provided some additional resources for Africa. But Africa will require more, and more flexible, support. African members welcome the forthcoming review of the IMF?s financing facilities for low-income countries; these facilities need to be sufficiently responsive and flexible to meet the diverse needs of African countries, including during the global downturn. This includes raising the limits on access to existing IMF facilities, which have become increasingly binding, and developing new short-term financing instruments that can instill confidence and provide quick and more ample access to finance should conditions deteriorate. African members also welcome the forthcoming reexamination of the IMF?s framework for assessing debt sustainability, which should aim to facilitate strong and sustainable economic growth, by ensuring that the evolving financing needs of African countries can be accommodated while preserving debt sustainability.

Expanded and Accelerated Capacity Building

4. We underline the importance of strong policy frameworks and institutions to address the global economic crisis. African members welcome the decision by the IMF to open two new Regional Technical Assistance Centers in Africa, in addition to expanding the existing three, which will provide enhanced assistance to Africa, while strengthening its timeliness and ownership. Long-term economic growth in Africa depends critically on reinforcing human and institutional capacity through technical assistance and training, including on a regional basis. African members call on the IMF to review its policy to charge for technical assistance to reflect its nature as a public good.

Enhanced Policy Dialogue
5. We agree that a frank and continuous dialogue between the IMF and its African members contributes greatly to strengthening policy advice and its effectiveness. The IMF?s global expertise and experience in economic policy formulation must be responsive to Africa?s needs for economic advice. Such advice is especially valuable at the time that national policy frameworks are formulated and the IMF will ensure that its analytical work is provided in a timely and balanced manner, taking into account African countries? development needs and specificities.

7. African countries, for their part, remain committed to the implementation of sound economic policies and the establishment of strong institutions that are consistent with their long-term development goals. They call on the IMF to further strengthen its support for regional integration, which bolsters economic development by enlarging markets and reducing vulnerability to shocks. We agree that the quality of the IMF?s policy advice is greatly enhanced through its presence on the ground and the IMF is committed to maintaining, and where possible, expanding its in-country presence in close consultation with its African members.


New partnership

8. The IMF and its African members are committed to a new, enhanced partnership. Notably, we agreed that:

? We will work together towards the shared goals of making IMF financing more timely and responsive, making its technical assistance more effective, and enhancing our dialogue on the policy challenges and opportunities facing Africa.
? We will build on the first steps that were taken in 2008 to increase the voice and representation of African members of the IMF, with the aim of agreeing rapidly on further steps in this direction to ensure that the diversity of the IMF?s membership is fully reflected in its governance structures.
? The implementation of the joint commitments between the IMF and its African members will be reviewed every six months in the context of the African Consultative Group.

Dar es Salaam, March 11 2009

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Asha-Rose Migiro, Deputy UN Secretary-General: Navigating the Shifting Tides of Globalization


It is a great privilege to join the IMF, high-level representatives from across Africa and the world, and my fellow Tanzanians to kick off the second day of this important conference.

The IMF is a vital member of the United Nations family. By pooling reserves and sharing risk, the Fund helps our Member States navigate the shifting tides of globalization. The Fund?s support for Africa?s economic development is critically important.

Africa has achieved a decade of admirable growth, but its macroeconomic accomplishments remain poorly known outside the continent. Several countries have seen years of low inflation, strong fiscal balances, growing reserves and large increases in foreign direct investment. Still, old myths about Africa?s economies persist.

We commonly hear that African governments should do more to mobilize domestic resources for development. In fact, government revenue increased by about 7 percentage points of GDP over the past ten years?faster than gains in industrialized countries when they were at similar stages of development.

Africa has benefited from the demand for commodities, debt relief and investors? search for yield. But prudent and consistent policy decisions have played an equally important role in Africa?s strong performance.

Governance indicators have improved steadily. The number of democracies in Africa has almost tripled. More than half of the remaining countries on the continent are in democratic transitions.

There have also been major improvements in policies and institutions. For the past seven years, Africa?s scores under the World Bank?s Country Policy and Institutional Assessment have been rising. And three of the top 10 reformers in the International Finance Corporation?s ?Doing Business? index are African countries.

Of course, more could?and should?be done. But these remarkable indicators send an unequivocal message: Africa?s economies have changed for the better.

Yet, these positive developments are now imperiled by the global economic crisis. Today?s conference, coming just three weeks ahead of the G-20 Summit in London, must rally support to protect Africa?s achievements.

An old proverb holds that ?good luck comes in slender currents and misfortune comes in rolling tides.? Globalization can make these tides roll faster than ever before.

We can draw some encouragement from the continent?s recent track record. Africa?s resolve has been tested by previous crises, just as it is being tested now. And Africa has persevered.

But we must also acknowledge the gravity of the current challenges facing Africa. Climate change is worsening drought and floods. Food prices remain high and volatile. The recent drop in energy prices has cut investment in new supplies, and prices are likely to spike again once global demand recovers.

None of these individual challenges is unprecedented. But together, they are a uniquely daunting mix.

Already, they have created instability in roughly a quarter of the world?s countries.

Africa?s isolation from international capital markets does not protect it from global economic turmoil. To the contrary, it limits Africa?s options for financing the Millennium Development Goals. As tourism, remittances, and foreign investment dry up, many African countries are left with few means to earn foreign exchange.

Even trade credits have become difficult to obtain. This is a serious problem. Several African countries depend on one or two commodities for more than half their foreign-exchange earnings.

Excellencies,

Dear friends,

All of us dream of a day when Africa no longer needs development assistance. That day is not yet here. Private external finance is frozen. And there is little room to raise more domestic revenue. Unless there is a genuine effort to deliver on existing commitments to increase Official Development Assistance, the MDGs will remain elusive. Further instability and incalculable human suffering could result.

There are no other alternatives. Aid commitments must be met.

The OECD/DAC estimates that the Gleneagles Commitment to double annual ODA to Africa by 2010 is worth about 62 billion dollars in nominal terms. This sounds like a large sum, but it appears more attainable when we consider the trillions of dollars that have been committed to stimulus packages in industrialized countries.

Development does not happen overnight. The rising tide of globalization does not spontaneously lift all boats. And macroeconomic stability is a necessary but not sufficient condition for poverty reduction.

Experience provides a clear guide. If we want to achieve economic and social development, we need a supportive policy environment and concerted action.

No country in Africa is on track to reach all of the Millennium Development Goals by 2015. Although there have been notable successes on some Goals, on others progress lags.

Undoubtedly, the responsibility to achieve the MDGs rests with African Governments. But most African countries have done their part. They have put their macroeconomic houses in order. They have designed not one but two generations of Poverty Reduction Strategy Papers. The world needs to match these efforts with increased aid and better technical assistance.

In 2007, the Secretary-General brought together eight leading multilateral organizations?including the IMF? to intensify their support for the MDGs in Africa. The MDG Africa Steering Group?s recommendations were endorsed by the African Union and launched at last year?s summit in Sharm el Sheikh. We need to carry out this plan.

We know it can be done. The Steering Group?s work with several of your countries on ?Gleneagles Scenarios? shows that scaled-up ODA can be absorbed and spent without threatening Africa?s hard-won macroeconomic stability. Yet tried-and-true projects and programmes lack financing. Africa?s development partners need to deliver with scaled-up aid. The credibility of international commitments depends on it.

Secretary-General Ban will carry this message to the G-20 Leaders? Summit in April in London. Just as he did at the G-20 Summit in Washington, the Secretary-General will seek to bridge the concerns of the G-20 and those of the global community. He will advocate for increased ODA. Measures to support Africa could include an increase in concessional resources at the IMF. He will call on leaders to resist protectionism. And he will urge industrialized nations to coordinate their stimulus packages and to dedicate a portion of them to development assistance.

The Secretary-General will also argue that the crisis provides a real opportunity to put in place a ?green new deal?. That means taking well-proven measures to ?climate-proof? the MDGs. And it means securing an agreement on climate change later this year at Copenhagen.

Dear Friends,

The United Nations and its partners have made steadfast efforts to strengthen international support for Africa?s development.

? We brought the world together in 2000 to agree on the MDGs;
? In Monterrey and more recently in Doha, we secured commitments to finance the Goals;
? At the World Summit in 2005, we outlined practical plans to reach the MDGs;
? At Paris and Accra we agreed on ways to make development finance more effective;
? And last September in New York, we mobilized $17 billion in commitments.

We need to build on these efforts. What we don?t need is more promises. According to the MDG Africa Steering Group, existing commitments are enough to secure the MDGs in Africa. But these commitments must be fulfilled. The Steering Group?s recommendations lay out how this could be done.

The Secretary-General, for his part, is working on many fronts. His High-Level Task Force on the Global Food Crisis is acting to provide help to small-holder farmers in time for the upcoming planting season. I urge donors to support the Task Force?s work. And I encourage Ministers to seek its assistance. Recent harvests in Malawi and at Millennium Villages across the continent demonstrate that, with adequate resources, African farmers can produce remarkable results.

We also need to ensure that Africa?s own initiatives reach their potential. The New Partnership for Africa?s Development?NEPAD?should be given additional support. Every country should participate in the Africa Peer Review Mechanism. NEPAD?s short-term action plan for infrastructure and the Infrastructure Consortium for Africa need to be strengthened. And we should make greater use of the Comprehensive Africa Agriculture Development Programme to boost agricultural productivity.

The United Nations system is working to enhance Africa?s capacity to benefit from these initiatives. We support efforts to design MDG-based development strategies, improve resource use, and carry out projects more effectively. We want to ensure that macro-level spending is complemented by micro-level efficiencies.

African countries have committed themselves to globalization. The international community has a responsibility to help them reap its rewards and transform these gains into real reductions in poverty. In these uncertain times, we must also guard against pressures to retreat back into protectionism.

The current crisis presents unparalleled threats to the poor and vulnerable. It also offers us a singular chance to implement policies and programmes that alleviate poverty and enhance economic growth in equal measure.

President Nyerere often emphasized the importance of working together. Our common interests are greater than those of any one country, any region, or any continent.

Together, we can transform the global economy into a global community whose tides can be safely navigated by Africa?s countries. There are no magic solutions, but Africa?s recent economic performance gives us grounds for optimism.

The IMF and Tanzania have done us a great service by convening this conference. By bringing us together, they remind us that during a time of crisis we should raise our ambitions, not shrink our horizons. Excellencies, I urge you to keep your sights set high.

Thank you.

[mwanakijiji]

Asante sana dRU!!