Africa: Human Development Report, 2002, 07/29/02

Africa: Human Development Report, 2002, 07/29/02

Africa: Human Development Report, 2002 Date distributed (ymd): 020729 Document reposted by Africa Action

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This posting contains material drawn from the just-released Human Development Report 2002 and related press releases. The full report and press releases are available at:

HDR 2002 focuses on the "democracy deficit" at both national and global levels. Among its themes are "deepening democracy" at national levels by other measures that go beyond periodical elections and beginning reforms in structure of multilateral institutions to allow for more democratic input.

Included in this posting, in addition to excerpts from UNDP press releases, are (1) excerpts from the section of Chapter 5 focused on changes needed in the governance of multilateral economic institutions, and (2) data on public expenditures by African countries, taken from Table 17 in HDR 2002.

Notably, this table shows that, among 50 African countries, as of the latest data available, at least 29 still spent more on debt service to foreign creditors than on health, and at least 13 spent more on the military than on health.

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UNDP Press Release

New Wave of Democracy-Building Urgently Needed

"Democracy deficits" in many countries put human development and security at risk

Manila, 24 July 2002 - The wave of democracy-building of the 1980s and 1990s has stalled, with many countries lapsing back into authoritarianism or facing rising economic and social tensions, warns this year's Human Development Report (HDR), commissioned by the United Nations Development Programme (UNDP) and released today. In response, it calls for a new emphasis on giving ordinary people a greater say in both national and global policy making.

"Development policies since the early 1980s have focused largely on economics and markets," said Mark Malloch Brown, UNDP Administrator. "Those things are important. But the big lesson of this period is never ignore the critical role of politics in allowing people to shape their own lives. Political development is the forgotten dimension of human development."

Going beyond arguments for 'good governance' that call for regulatory transparency and management efficiency for growth, HDR 2002 lays out a broad conception of what is good governance. It means not only ridding societies of corruption but also giving people the rights, the means, and the capacity to participate in the decisions that affect their lives and to hold their governments accountable for what they do. It means fair and just democratic governance.

The Report looks at the advance of democracy in the 20th Century and how it has affected developing countries and poor people. It argues that democracy is neither a luxury nor a panacea for poor countries. It is intrinsic to the process of human development, the freedom and the choice that allows an individual or a group dignity and fulfillment within any society. ...


UNDP Press Release (excerpts)

International Institutions Need Injection of Democracy Global civil society campaigns an opportunity, not a threat

Manila, 24 July 2002 - Protesters in both developed and developing countries in recent years have been motivated by concern that poor people and countries are losing out in the way that global affairs are managed. Whether it is the trade barriers and subsidies that keep poor country farmers out of rich country markets, or the slow response to the spread of HIV/AIDS in Africa, the leading global powers and institutions stand accused of being unfair and out of touch.

But it doesn't have to be this way, says this year's Human Development Report, commissioned by the United Nations Development Programme (UNDP) and released today. The Report calls for concrete reforms to increase the role of developing countries in international institutions and make them more open and accountable to the people and countries whose lives they affect. Nearly half of the voting power in the World Bank and International Monetary Fund (IMF) rests in the hands of seven countries. And though all countries have a seat and a vote in the World Trade Organization- in practice, decisions are taken in small group meetings and heavily influenced by Canada, the European Union, Japan and the United States. In 2000, 15 African countries did not have a single trade representative stationed at the World Trade Organization (WTO).

"Powerful states are always going to have a major role in global decision-making" said Mark Malloch Brown, UNDP Administrator, "But there is plenty of room to give poorer countries a real say in helping confront the challenges of a more interdependent world."

The Report highlights a number of reforms that could address some of the more obvious imbalances in global decision-making. These include: eliminating the UN Security Council veto, reforming the selection process for the heads of the IMF and World Bank (currently controlled by Europe and the United States, respectively), and new programmes to help the poorest countries better represent their interests at the WTO. ...

The Report says that recent global civil society campaigns - on everything from reducing poor country debt to accessing essential medicines under the TRIPS intellectual property agreement - have pointed at ways to reach more collaborative solutions to global problems in an interdependent world. ...

Rather than feeling threatened by such global activism, the international community should see it as an opportunity to inject new energy and popular legitimacy into global decision-making, the Report argues. ...

"Global civil society movements have been behind some of the most significant global policy shifts of the last decade," Fukuda-Parr stated. "But civic activism is not a substitute for democratic principles in formal decision making structures. Just as consulting with a few NGOs is not a substitute for a parliamentary debate at the national level, democratic principles require that all countries get a hearing in global institutions and decisions."


CHAPTER 5: Deepening Democracy at the Global Level

[brief excerpts from section on multilateral organizations]

Although globalization has vastly expanded the demands on global institutions, it has also heightened a crisis of legitimacy and effectiveness. Large parts of the public no longer believe that their interests are represented in institutions such as the IMF, World Bank, UN Security Council and WTO or that the institutions are adequately accountable for what they do. Representation and accountability have always been weak in these multilateral institutions. But today the weaknesses are glaring because the institutions are being called on by their powerful members to intrude much more deeply into areas previously the preserve of national governments especially in developing countries. Over the past two decades these institutions have increasingly prescribed and required structural and institutional reforms. For example, in the 1980s countries that borrowed from the IMF and World Bank were required to meet 6-10 performance criteria and in the 1990s, some 26.

Efforts to deepen democracy in international institutions must confront the realities of global power. Powerful countries will inevitably invest more energy and political capital in institutions that enable their power to be exercised. Once they are members of an elite club, countries are reluctant to lose that power or see it diluted by opening to new members. This explains why proposals for reform always encounter stiff resistance. And that is why broad acceptance of the principle of democratization has translated into so little progress at the level of specific proposals.

Although developing countries are deeply affected by the decisions of institutions such as the IMF, World Bank and WTO, they have little power in their decisionmaking. There is an unavoidable democratic deficit in international organizations because people do not get to directly elect (or throw out) their representatives. This would be true even if all member countries of international organizations were flourishing democracies. ... That said, however, the democratic deficit does not rule out improving the representativeness of international organizations.

The role of developing country governments in global governance needs to be bolstered through changes in formal representation. This is a necessary (albeit insufficient) condition to redress the existing bias in international organizations. ...

What is needed is to rewrite the way seats and votes are allocated within international organizations, to better recognize the increased stake of developing countries. Their cooperation and commitment to international agreements is vital if any international organization is to succeed in managing globalization.

For this reason the old rules about representation are no longer viable or desirable. Put bluntly, the IMF and World Bank will not be able to do their jobs effectively if they remain tied to structures that reflect the balance of power at the end of the Second World War. In the past 55 years their roles and duties have changed beyond recognition, as have the expectations of their vastly increased membership.

Nearly half of the voting power in the World Bank and IMF rests in the hands of seven countries [U.S., Japan, France, U.K.,Saudi Arabia, Germany, Russian Federation] . This voting power is exercised in the formal decisionmaking bodies the executive boards of each institution.

Equally important are the informal influences and traditions that shape the work of these organizations. These informal processes further weight the scales in favour of industrial countries. For example, the heads of the World Bank and IMF are chosen according to a political convention whereby the United States and Europe nominate their candidate for each, respectively. Other countries and critics rightly brand the process as undemocratic and insufficiently accountable.

Yet more profoundly, the institutions are often criticized by academics, industrial country NGOs and developing country analysts for basing their economic advice and policy conditionality on a narrow world view that reflects the interests of their most powerful members. In particular, they are widely perceived as being overly accountable to their largest shareholder, largely through informal influences such as the location and staffing of the organizations and their susceptibility to pressure on select issues.

These concerns about who the IMF and World Bank represent have been heightened as the institutions have begun to prescribe policies over an ever broader range of issues. ... The new role of the IMF and World Bank highlights the need for deeper participation by their borrowers: developing countries.

A primary source of contention relates to the shares of developing and industrial countries in decisionmaking. Members of the IMF do not have equal voting power. Voting weights are based on two components. Each member has a set of 250 basic votes that come with membership. The second component is determined by economic power. Votes accompany country quotas that reflect the economic strength of countries. Since the formation of the IMF there has been a major imbalance in the evolution of the two sources of voting power. Basic votes have declined dramatically as quotas have increased. The share of basic votes in voting power has declined from 12.4 % to 2.1% . At the same time, an additional 135 countries have become members, including many transition economies.

During this period the basic nature of the IMF and World Bank has changed. They were created at the end of the Second World War as institutions of mutual assistance. The IMF would provide resources to any country facing temporary balance of payments difficulties. The World Bank would help channel investment to countries for postwar reconstruction and development. This sense of mutual assistance has changed in the intervening years.

Today the IMF and World Bank lend exclusively to developing and emerging economies. Furthermore, their loans are linked to conditions that increasingly impinge on the domestic policies of the state. The result is a new kind of division between creditor countries on one hand, who enjoy increased decisionmaking power and have used it to expand conditionality, and borrowing countries on the other, who view conditionality as externally imposed. This can be particularly worrisome when there is considerable division of opinion on that policy advice, and when the risks associated with the policy advice are borne almost exclusively by the people of the borrowing country. ...

There is now greater recognition of the need for the World Bank and the IMF to increase the representation of developing countries. They could do so in a number of ways.

First, by increasing the proportion of basic votes allocated to each member. ...

Second, by enhancing the voice of developing countries within the institutions. Formally, all members of the IMF and World Bank executive boards are supposed to appoint the institutions presidents. But by convention, Europeans select a candidate for director of IMF and the U. S. government selects the head of the World Bank. ... A selection committee for such a post would enable broader participation and transparency.

Another step would be increasing the number of seats for developing countries on the executive boards. At present executive directors from developing countries represent large constituencies and have minimal input on policy formation. ...

Third, by making the institutions more accountable for their actions, not just to their board members but also to the people affected by their decisions. Governments are held accountable through a variety of social, political and legal institutions. These institutions must also be used to make global financial institutions more accountable. Specifically, this means ensuring transparency and monitoring and evaluating their rules, decisions, policies and actions. ...

To be effective, the results of all of these evaluations must be published, followed up and investigated, and necessary changes undertaken. This is particularly important for large organizations suffering from considerable inertia.

Without publication of independent assessments of what organizations are doing, it is not only difficult for the public to judge how well or poorly an organization is undertaking its responsibilities, it is also impossible for outsiders to offer support to insiders who recognize the need for change. By publishing critical reports, institutions can catalyse public attention and external pressure for change, helping to overcome inertia or vested interests within the organization. ...


Priorities in Public Spending

This table, taken from Table 17 of the 2002 Human Development Report, contains estimates of public expenditures by African countries on education, health, the military, and debt service to foreign creditors. Each column is expressed as a percentage of GDP. Although the figures are for different years, and data from some countries is missing, the table clearly shows how military expenditures and debt service takes resources desperately needed for investment in human development.

The table shows that, of 50 African countries,

* at least 29 spent more on debt service than on health;

* at least 13 spent more on the military than on health;

* at least 9 spent more on debt service than on health and education combined; and

* at least 5 spent more on the military than on health and education combined.

In comparision, each of the top 22 ranked countries on the Human Development Index, from Sweden to Israel, spend more than 5% of much larger GDP on health.

[To view columns, put text in courier font.]

HDI Education Health Military Debt Rank Country 1995-97 1998 2000 2000

64 Libya .. .. .. .. 67 Mauritius 4.6 1.8 0.2 12.6 97 Tunisia 7.7 2.2 1.7 9.8 100 Cape Verde .. 1.8 1.3 2.9 106 Algeria 5.1 2.6 3.5 8.4 107 South Africa 7.6 3.3 1.5 3.1 111 Equatorial Guinea 1.7 .. .. 0.4 115 Egypt 4.8 .. 2.3 1.8 117 Gabon 2.9 2.1 0.3 9.5 119 Sao Tome & Principe .. .. .. 9.5

122 Namibia 9.1 3.3 3.3 .. 123 Morocco 5.3 1.2 4.2 10.0 125 Swaziland 5.7 2.5 1.6 1.6 126 Botswana 8.6 2.5 3.7 1.3 128 Zimbabwe 7.1 3.0 4.8 6.4 129 Ghana 4.2 1.7 1.0 9.1 132 Lesotho 8.4 .. 3.1 7.3 134 Kenya 6.5 2.4 1.8 4.6 135 Cameroon .. 1.0 1.3 6.3 136 Congo 6.1 2.0 .. 1.3

137 Comoros .. .. .. 1.3 139 Sudan 1.4 .. 3.0 0.5 141 Togo 4.5 1.3 .. 2.4 147 Madagascar 1.9 1.1 1.2 2.4 148 Nigeria 0.7 0.8 0.9 2.5 149 Djibouti .. 5.4 4.4 2.4 150 Uganda 2.6 1.9 1.8 2.6 151 Tanzania .. 1.3 1.3 2.4 152 Mauritania 5.1 1.4 .. 10.7 153 Zambia 2.2 3.6 0.6 6.4

154 Senegal 3.7 2.6 1.4 5.2 155 Congo, DR .. .. .. 0.3 156 Cote d'Ivoire 5.0 1.2 .. 10.9 157 Eritrea 1.8 .. 22.9 0.5 158 Benin 3.2 1.6 .. 3.5 159 Guinea 1.9 2.3 1.5 4.4 160 Gambia 4.9 2.3 1.1 4.4 161 Angola .. .. 21.2 13.6 162 Rwanda .. 2.0 3.0 2.0 163 Malawi 5.4 2.8 0.8 3.5

164 Mali 2.2 2.1 2.5 4.2 165 CAR .. 2.0 .. 1.5 166 Chad 2.2 2.3 1.0 1.9 167 Guinea-Bissau .. .. 1.3 2.9 168 Ethiopia 4.0 1.3 9.4 2.2 169 Burkina Faso 3.6 1.5 1.6 2.5 170 Mozambique .. 2.8 2.5 2.3 171 Burundi 4.0 0.6 5.4 3.1 172 Niger 2.3 1.2 1.4 1.6 173 Sierra Leone .. 0.9 1.4 6.7


Message-Id: <> From: "Africa Action" <> Date: Mon, 29 Jul 2002 16:07:54 -0500 Subject: Africa: Human Development Report, 2002

Editor: Ali B. Ali-Dinar

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