East AFRITAC Inauguration Ceremony—Welcoming Remarks
By Mr. Abdoulaye Bio-Tchané, Director, African Department
East AFRITAC Inauguration Ceremony—Keynote Speech, By Eduardo Aninat, Deputy Managing Director
The Africa Regional Technical Assistance Centers
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East AFRITAC Inauguration Ceremony|
By the President of the United Republic of Tanzania,
His Excellency Benjamin William Mkapa
Dar es Salaam, October 24, 2002
Deputy Managing Director of the IMF, Dr. Eduardo Aninat;
After all the speeches you have heard this morning, I can perfectly well understand your trepidation at having to endure yet another one. What is worse, this time it is a speech from a politician. But, I beg your indulgence. And if you promise not to shake your watches to find out if they are still working, I promise to speak not as an economist but as a politician, and to keep my comments as short and sweet as only a practiced politician can.
The English poet, Alfred Lord Tennyson, in his "The Charge of the Light Brigade" (1854), lyrically wrote thus:
Forward the Light Brigade
Ladies and Gentlemen,
There are those in the world, who in contemplating relations between poor countries and the Bretton Woods Institutions, regard countries like ours as Lord Tennyson's "Light Brigade", moving boldly forward to the jaws of Death and Hell, at the command and behest of the IMF and the World Bank, with no right to ask, no right to reply, no right to reason; only to do and die in the valley of economic bondage and assured death of sovereignty.
This, of course, could not be further from the truth; certainly not in today's IMF—"the new IMF"—or the new World Bank. A central message in the IMF's decision to open regional centers for technical assistance in the Pacific, the Caribbean Basin and sub-Saharan Africa is that of enhancing economic sovereignty of poor countries in a complex and rapidly changing world—nationally, regionally and globally.
EAST-AFRITAC Center is aimed at building the capacity of Eritrea, of Ethiopia, of Kenya, of Rwanda, of Tanzania and of Uganda to self-develop, to plan strategically, to ask the right questions, to reply intelligently to questions about the decisions we make, to reason deeply and logically, and certainly not to do and die at the behest of anyone outside our countries!!
At independence, our economies were nothing more than economic appendages of metropolitan powers. Each of our countries was exasperated at what we rightly thought was a form of neo-colonialism. Each of us charted different paths in dealing with that reality, and in asserting ourselves as independent sovereign states—both politically and economically.
The world was different then, and the technical assistance we received as we tried to build national economies was also of a different kind. Today, we all face the realities of a new world, and the imminent prospect of heightened challenges of globalization driven by a predominant liberal market economy system—albeit of different models and shades—but all characterized by dazzling speed and intense competition.
Unlike in the past, the relationship between the IMF and African countries is presently characterized by unprecedented, repeat unprecedented, mutual respect, flexibility in the design of home-grown programs, and readiness to experiment with new and more efficient and effective ways of delivering needed technical assistance. In these circumstances, the stakeholders of EAST-AFRITAC have a unique opportunity to learn from one another, and to design acceptable technical assistance programs, tailored to our countries' specific needs in a rapidly
changing domestic and external environment.
Likewise, this regional technical assistance center offers opportunity, especially through the Steering Committee, for the member countries to work together, to share the substantial amount of technical resources within the region, and—as envisaged under NEPAD-to exercise positive peer pressure on one another.
I think it was John Maynard Keynes who said, "The difficulty lies not so much in developing new ideas as in escaping from old ones."
This Center should help us not only in building capacity for new policy ideas, but also in escaping from a world that remains only in our imagination. We need the capacity to peer into the future, and to plan well for it; not to be nostalgic of a bygone era. The new realities we face are not a passing fad; they reflect an inevitable global paradigm shift. They also demand an urgent reassessment of how poor nations should better manage their economies, and their monetary and fiscal stimuli for growth in a competitive world.
This Center answers a felt need on our part. It is not imposed on us. It is intended to enhance our capacity to prudently exercise our economic sovereignty, and ownership of our development process, through better economic management. Ownership without the requisite capacity to make prudent choices; and implement them, in the context of a rapidly globalizing world, is an exercise in futility. The Center is not here to decide policy issues for us; it is here to enable us to decide wisely, from a point of greater knowledge and skill.
The Center will be successful if it makes itself superfluous, by quickly building national or regional capacities for the kind of work it will be doing. It is a transition; a bridge to help us cross the divide from low to high capacity, nationally and regionally.
In his address to the last Annual Meeting of the Board of Governors on the 29th of last month in Washington, the IMF Managing Director, Mr. Horst Köhler, stated that the vision of the future role of the IMF was one of an institution that:
• Is committed to openness, dialogue and learning from experience;
My expectation of the role of this Center in Dar es Salaam is that it will pursue this same vision, at the national and regional level in Eastern Africa; and that it will help build national and regional capacities in all these areas, namely, openness, dialogue, learning from experience, provision of national and regional public goods, sustainable and broadly-shared economic growth, and competence in ensuring stability of the national and regional financial systems. The Center must also be a vehicle for active implementation of the Fund's reaffirmed commitment to building a "culture of listening and learning."
Ladies and Gentlemen,
Our experience in Tanzania suggests that despite the substantial technical assistance that we received over the years in the macroeconomic and structural areas, our human and institutional capacity for sound economic management remains severely constrained in relation to the new challenges ahead.
Tanzania has been able to make some headway in restoring macroeconomic stability and implementing important structural reforms. Continued inflow of technical assistance was instrumental in the attainment of these successes, and we are grateful for it. But the short-term expediency of previous technical assistance has now to give way to longer-term commitment to build strong and lasting foundations for sound economic management. On a personal level, I certainly would wish to leave in place strong institutions and established best practices that will outlive my Presidency.
The focus should no longer be on filling gaps in technical capacity in the various Ministries, Departments and Agencies, or on "fire-fighting" efforts, such as when we had to produce reports with the right lingo, and appropriate sprinkling of data, to meet the requirements of our development partners before they supported us.
In the past, our officials often had to set aside their normal work to meet overlapping demands of successive advisory missions from overseas. Moreover, the design of reform programs, deemed worthy of support by our multilateral and bilateral partners, had almost been elevated to a ceremony, and presided over only by periodic expert missions. To help overcome these shortcomings, the Steering Committee of EAST-AFRITAC should direct the focus of its work toward long-term capacity building activities, rather than short-term operational demands, or ad hoc "fire-fighting" activities.
Moreover, I assume that a technical expert, normally very well paid, has understandable incentive to cling to his or her lucrative position, to build a nest egg for him- or herself, and, if necessary, to cede his or her position to a colleague from the mother institution or country. In short, technical assistance experts, like politicians, are mortals, operating in contexts that provide built-in incentives for self-perpetuation and maximization of perceived gains.
A useful inference here is that the Steering Committee of EAST-AFRITAC would be well-advised to look beyond high-sounding, but ineffective, contractual demands for training and, in addition, use positive incentives and other techniques for strengthening training and accelerating the build-up of capacity.
Mr. Deputy Managing Director,
I would like you to know that Tanzania and other African countries are very appreciative of the ongoing efforts to make the IMF and the World Bank more sensitive to the special needs and development problems facing our continent. We are particularly grateful to Mr. Köhler, the Managing Director of the IMF, for following up seriously on our request, put forward to him during the meeting with African leaders in Dar es Salaam in February last year, to help us build capacity for managing economic reform management and poverty reduction efforts. Thanks to his unrelenting efforts, today we are launching the EAST-AFRITAC.
In keeping with the spirit of NEPAD and the PRSP process, the location of EAST-AFRITAC close to home, coupled with the thoughtful operational modalities that are being developed for this institution, we believe that the Center will be a powerful tool for strengthening our countries' capacities for economic management. In this context, it is important to note that the economic situation within and across countries is changing constantly, implying that the development of economic management capacity in our countries should also be managed flexibly.
In Tanzania, for example, substantial progress has been made in restoring macroeconomic stability, thereby paving the way for heightened attention to poverty reduction, acceleration of broad-based economic growth, and focused reform to make our economy regionally and globally competitive. We will be looking to EAST-AFRITAC for a helping hand in forging homegrown policies to meet these challenges. Significantly, we are hoping that this Center will enable our own experts-nationally and regionally-to network effectively, and to learn from experts in Africa and elsewhere. Moreover, as we continue to deepen reforms in many areas of our economy, including those which are of special interest to our private sector, we will be looking to EAST-AFRITAC for more specialized forms of technical assistance in the traditional areas of IMF expertise, and in closely related fields.
I understand that the Center is expected to focus its capacity building assistance on selected areas of core responsibility for the IMF, namely macroeconomic policy; tax policy and revenue-administration; public expenditure management; monetary policy; the exchange rate system; financial sector sustainability; and statistics. It is appropriate that the IMF should continue to guide capacity building efforts in these areas in which it has acknowledged competence. But the Steering Committee of the Center will need to strike a delicate balance between the more traditional forms of support in the core areas, and the less-than-traditional forms of assistance, in these or related areas, that might be equally relevant for improved macroeconomic performance in the ever-changing circumstances facing our countries.
Mr. Deputy Managing Director,
I concur fully with your call for determined efforts to ensure a more effective delivery of technical assistance by EAST-AFRITAC. In particular, I would underscore, for the Steering Committee, the need for carefully formulated and time-bound programs, effective coordination of ongoing efforts, and the importance of mutual accountability among the stakeholders. In this connection, developing mutual agreed benchmarks, to gauge the effectiveness of technical assistance programs in the beneficiary countries, could strengthen the peer review process through the Steering Committee of EAST-AFRITAC.
Ladies and Gentlemen,
As a national leader in a poor country, and equally in my capacity as Co-Chair of the World Commission on the Social Dimension of Globalization, I want also to commend the IMF for a new focus to make globalization more relevant and beneficial to countries like mine. In the 29 September 2002 speech by Mr. Köhler I already referred to, he listed what he termed "five guideposts for investing in better globalization." I agree with him fully, so I take the liberty to quote those guideposts from his speech:
• First, interdependence. Growing interdependence means that no nation (or institution) should neglect the impact of its actions on the rest of the world.
• Second, self-responsibility. Self-responsibility is the natural counterpart of freedom, human dignity, and national identity. Our actions should support and encourage it.
• Third, solidarity. The fight against world poverty is everybody's business. We should all be actively engaged in promoting socially and environmentally sustainable development, by helping the poor to help themselves.
• Fourth, a level playing field. This requires sound institutions and respect for the rule of law within nations. It requires transparent international decision-making. And it also requires an inclusive process for developing internationally accepted standards and codes of conduct, as rules of the game for the global economy.
• Fifth and finally, no one-size-fits-all approach. The diversity of the human experience should be understood as part of the wealth of this planet.
Ladies and Gentlemen,
The other thing I should like to echo from Mr. Köhler's speech is the need for the IMF and other donors to help countries like ours, that are doing all they can to ensure prudent economic management and stability, cope with the volatility and risks of a global economy, with in-built room for maneuver in difficult times, such as in drastic falls in commodity prices, or in the event of war against Iraq. I urge the IMF not only to help us develop the capacity for sound economic management, but also to have in place contingency plans to cushion our fledgling economies against unforeseen external or internal shocks.
Ladies and Gentlemen,
In conclusion, let me underline that the setting up of EAST-AFRITAC has come at a time when our needs for capacity building are critical. Our countries are struggling to cope with the ever-increasing pace of globalization, which calls for opening up our economies, including our capital accounts, to the outside world. At the same time, a number of new challenges in capacity building have emerged, particularly those related to the building up of revenue bases, expenditure control systems, domestic debt management systems, money laundering, terrorism, and the need to set up financial intelligence units. All these require expertise and resources to address them. We hope the Center will be able to meet the challenges of human resources development in these areas, and become a source of advice, especially on strategies for steering our economies in the right direction.
Africans must be in charge of their destiny; we must ourselves determine the task, and chart the path ahead. But, we can only do so well if we have the knowledge, the skills, and the capacity. To insist you are in charge when you do not have the capacity to make meaningful and informed choices is meaningless nationalism.
We in Tanzania feel greatly honored to host this Center. We now face the challenge to prove we were worthy of this trust and honor. We will strive to live up to our obligations; but above all to fully utilize the Center to improve our technical capacity for policy reform, for macroeconomic stability, for broad-based growth and for the war on poverty.
Ladies and Gentlemen,
I began by assuring you that I will speak as an economist. I believe I have spoken long enough to keep my credentials as a politician intact, especially as in the next few days I will have to chair the election Congress of my Party. Yet, I fear I may have also sounded a little bit pedantic. Now, that is not too good. For then I will not be a politician, but a policy analyst. And I am told a policy analyst is someone unethical enough to be a lawyer, impractical enough to be a theologian, and pedantic enough to be an economist!
Thank you for your kind attention, and I now declare the EAST-AFRITAC Center officially opened.
IMF EXTERNAL RELATIONS DEPARTMENT