In conversation with Michel Camdessus

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Welcome to the first of a two-part series on this year’s Africa Progress Panel Report, ‘Jobs, Justice and Equity’. Here, our Associate Editor, Sarah Jane Cooper-Knock shares her conversation with Panel member Michael Camdessus, the previous Managing Director of the IMF, about the report.

‘The Arab Spring has not gone unnoticed by Africa’s youth. The circumstances may be different, but young people in Africa also care about jobs, justice and equality – and governments ignore them at their peril’. This was the firm warning that framed the 2012 Africa Progress Panel report, ‘Jobs, Justice and Equity’. The report argues there has been impressive political and economic progress in parts of Africa in the last decade. That said, ‘deep persistent and enduring inequalities’ continue to exist, as many are left on the social, economic and political margins. If economic progress is going to lead to sustainable human development, the panel argue, then there must be a relentless drive for jobs, justice and equity in the continent.

The Africa Progress Panel, established in 2007, is a diverse collection of opinion leaders and accomplished figures from politics, economics, and the third sector, chaired by former UN Secretary-General, Kofi Annan. Following the report’s release I spoke to panel member Michel Camdessus, who served as Managing Director to the IMF from 1987 until 2000, about the report’s findings.

Laudably, the report claims that ‘economic growth alone is not enough’ in its call for a economic progress to be tied to equity and, therefore, political stability. I began by asking Camdessus whether he foresaw trade offs between these goals and, if so, which goals should take priority. His first response was to emphasise the importance of inequality. ‘I am happy that the African Progress Panel Report raises so vigorously this point about inequality’, he argued. ‘This is the issue that I for one would consider the number one problem of Africa and it was essential to give it a particular prominence and emphasis in our remarks to African leaders’.

Dealing with the question of trade offs, Camdessus argued that ‘there is never chance for reducing ethical integrity. This must be permanently preserved’. When it came to the trade off between economic efficiency and political stability, he argued, ‘in a very short term perspective it could happen where sometimes the temptation could be to give more importance to political stability or economic efficiency. Governments must know that this can only be a short term perspective and in a longer term perspective political stability will always require effort to promote economic efficiency, both must go hand in hand’.

Talk of economic efficiency inevitably led us to talk about Africa’s recent growth rates, which have been extraordinary. Between 2005 and 2009, India’s economic performance was outclassed by Uganda, and China’s was trumped by Ethiopia. Facts like these are certainly cause for celebration but, as scholars like Dudley Seers have been arguing since the sixties, growth tells us very little about the complex development of a nation, let alone a continent: a fact acknowledged in the panel’s report. What is needed, the APP highlight, is space for complexity in analyses of Africa.

As a recent article by our Editor, Nic Cheeseman, has highlighted, reporting on Africa is often been bipolar, swinging between Afro-pessimism and Afro-optimism. Both tendencies have received scornful satire from the likes of Duncan Clarke and Binyavanga Wainaina. The APP leads a more direct call for balanced reflection. This is not a particularly difficult goal, Camdessus argues, but it is a crucial one. Neither Afro-pessimism or Afro-optimism, he argues, will help to sustain long term confidence in the region whilst ‘difficult but sustainable progress’ is made over the coming years. ‘So’, he concludes, ‘it is very important to be very realistic in our views about the future and the difficulty of the travel towards a more sustainable future for the continent…Africa does not need impatient investors but they need people well informed of the high potential but also of the problems that need to be solved in Africa. And we want to convey this balanced view of the future’.

Speaking of investors, our conversation turned to the rising economic power of emergent powers. The APP report highlights the increasing importance of BRICs countries (Brazil, Russia, India and China) as well as Turkey and the Gulf region. In recent years, the role of China in Africa has garnered particular attention. This is unsurprising for, as the report states, trade between China and Africa had reached $160 billion in 2011; an increase of almost one third from 2010. LInks with China are not only important for trade but also Foreign Direct Investment, which has also been escalating over the past decade. Diversification of investment has served Africa well in the midst of the Eurozone crisis but, as Mr Camdesuss argues, this ‘very significant’ relationship also carries ‘risks in terms of economic sustainability and political sustainability’.

For, as APP’s report highlights, China does not operate in isolation from the spiral of austerity and low growth in Europe. More importantly, economic ties with emerging countries are currently focused on unprocessed minerals and the acquisition of land. This does not move Africa into the higher value-added areas of trade needed for sustainable growth and may hamper the development of small agriculture necessary that, the report argues, will be vital in spurring Africa’s progress forward.

So, what is the solution? Negotiation skills, Camdessus argues, will be increasingly critical to Africa’s ability to secure an equally profitable relationship with emerging powers, as will ‘efforts to increase and diversify…its partners’. Diversification in both partners and products must continue, he argues, so that relationships with China in particular are, ‘not so exclusive that Africa could be seen as obliged to accept…the terms of the contract: that sign up be dictated exclusively by China’.

Picking up on this theme of policy freedom and independence, I asked Mr Camdessus whether he felt that economic growth and historically low debt-service ratios within the continent would leave African leaders freer to choose their own economic policies and strategies. ‘I have no doubt that debt relief and economic growth have contributed to make African countries more financially independent’, he replied, quoting a recent World Bank and IMF report that 36 countries have seen a debt reduction was around 90% over the last 10 years. ‘This of course is formidable alleviation of a burden for Africa’, he concluded, ‘I am certain that this make this continent much better placed not only to accelerate its development but to also select its own policies’. Nonetheless, he defended the heavily-critiqued structural adjustment policies that have dominated the policy horizon for many countries on the continent at the behest of the IMF. ‘These had to be done. Now the countries are in a much better position to get sustainable development’.

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