Development Diplomacy, The
Washington Consensus, the SDGs &
Democratic Rules, Institutions
Policy Research and Analysis Department (PORAD), Ministry of Foreign Affairs, Addis Ababa, MFA Hall, Oct 6 2015
Costantinos Berhutesfa Costantinos, PhD
Professor of Public Policy, School of Graduate Studies, AAU & Chairman EITCo
With over one billion people still living in extreme poverty, accelerating progress towards the eradication of extreme poverty remains the primary goal of international development agencies, especially in Sub-Saharan Africa.
Seen from the outside, Africa is often characterized as a continent of civil conflict, of refugee and displaced populations of economic crisis. Yes, some of the bloodiest conflicts since the end of WW II have been among Africans.
Of course, this is a global picture, a picture that does not show us the details, the development and peace triumphs of a continent that has freed itself from the worst experience of colonial oppression. Gradually, African countries are rising, shaking off the shackles of poverty and conflict, and realizing rapid growth rates, improvements in human development, greater transparency and enhanced governance.
Yet amid this gruesome picture, Africa is rising as the fastest growing continent in terms of aggregate economic indicators. For instance,
- Ethiopia’s drive to be a middle income: 10% plus growth on broad-based social & economic transformational development.
- Poverty has been declining rapidly, both in rate as well as absolute number of the poor.
- Significant number of children, boys and girls alike, are in schools;
- The health programs are improving child survival rate and promising to achieve the target set for under five mortality.
- Substantial progress has been made in reducing both incidence and prevalence diseases.
- Gender disparities are significantly narrowing down in primary education level.
- The effort on environmental management and biodiversity is encouraging,
- Significant progress in creating, maintaining and expanding global partnership for development.
The draft Sustainable Development Goals (SDGs) proclaim 17 goals
The complex webs of SDGs demand that Africa fosters development diplomacy systems and leadership at all level of the NEGOTIATIONS of the SDGs.
Development Diplomacy
The SDGs being formulated require significant increases in investment in broad-based economic transformation. Up to $4.5 trillion per year in investment will be required between 2015 and 2030, which compared with current investment levels leaves an annual investment gap in sectors critical to the SDGs of around $3.1 trillion. Though this gap is far greater than available ODA funding, which reached an all-time high of $135 billion in 2013, filling this investment gap is not impossible. The financing gap constitutes approximately 3% of global GDP, 14% of global annual savings, or 1.1% of the value of global capital markets, estimated at $218 trillion.
FDI in sectors related to the SDGs are relatively low.. Hence, involving the private sector is critical. Only a fraction of the invested assets of banks, pension funds, insurers, foundations and transnationals is in sectors critical to the SDGs. Translating these assets into SDG-compatible investments is key, with the potential being greater in sectors such as infrastructure
Global capital markets represent a significant and scalable supply of capital to fund sustainable development. Currently valued at $218 trillion, global capital markets appear to be entering a protracted period of high liquidity and low cost which could last a decade or more
However, there are significant barriers impeding capital flows into these markets. Despite emerging and frontier markets contributing over 49% of global GDP, a fraction out of the roughly $218 trillion in global capital markets flows annually to these high-potential markets due to risks (real or perceived) and market inefficiencies
Development diplomacy is the art and
practice of conducting negotiations on FDI and Overseas Aid between representatives of states and donors. It is a form of public diplomacy that deals with the
- influence of public attitudes on foreign policy, encompassing arenas beyond old school dilomacy & international relations;
- the cultivation by states of public opinion in other countries; the interaction of businesses and interests;
- the reporting of foreign affairs and its impact on policy; communication between diplomats and foreign correspondents
- process of intercultural communications
The Washington Consensus
The Washington Consensus has spun opportunities and threats to social stability and political sustainability. The intent of this guest lecture is to develop ideas for dis-course, dialogue, and build consensus on vital issues of diplomacy, democracy and development.
Democratic development derives from the attainment of widespread literacy and education, or Political Rules & Institutions and a shared sense of national unity among citizens
The Washington Consensus
The Washington Consensus, which was meant to reinforce the above, included ten broad sets of recommendations. These revolve around fiscal policy discipline, redirection of public spending from subsidies to pro-poor services, tax, interest and interest rate reform, liberalization of trade and FDI, privatization, deregulation, prudent oversight of financial institutions and legal security for property rights. The Consensus has been the target of sharp criticism that it is a way to open up less developed countries to investments from large multinational corporations and their wealthy owners in advanced First World economies.
Challenges to Investment & Developmental negotiations to finance the SGDs
Africa has long been saddled with poor, even malevolent, development diplomacy and leadership: "predatory, kleptocratic, military-installed autocrats, illiterates, and puffed-up posturers".
- By far the most egregious examples come from Nigeria, the DRC, CAR, The Sudans, etc., phantom states that have been run aground despite their abundant natural resources.
- Nevertheless, these cases are by no means unrepresentative: by some measures, 90% of African nations have experienced despotic rule in the last three decades.
- Such leaders use power as an end in itself, rather than for the public good; they are indifferent to the progress of their citizens, they are unswayed by reason and employ poisonous social or racial ideologies; hypocrites, shifting blame for their distress.
- The current choice of African diplomats to the international community has also become a vexing issue to many
On the one hand, there are the imperatives to give political parties political space by assigning their top echelons to the executive branch that must be stuffed by members of leading parties.
On the other hand, leaders are expected to display a high degree of knoewledge to jump-start nations from the scorching underdevelopment.
Positions in government are indeed political offices and any leading party by all counts has the right, privilege and prerogative over who will represent it in the vast boondocks of state bureaucracy. Let us not be naïve that Cabinet level posts are positions that can be filled in with an ad in the newspaper. They are negotiated and hence only those in political power are expected to land there. Nonetheless, this does not mean they are just representatives of a certain political spectrum that lack the capacity to face the demanding tasks that determines the public good.
Governance, Political Liberalization and Democracy
Governance is the conscious management of regimes with the aim of enhancing the effective-ness of political authority. Governance can be thought of as the applied realm of politics, in which political actors seek mechanisms to convert political preferences into managing society. Good governance involves improvements in the technical competence and efficiency of the public sector as well as measures to make public policy more accountable, transparent, and predictable to society.
Political liberalization
Political liberalization occurs when a governing elite grants or extends civil and political rights that had previously been denied. These rights may benefit individuals (such as rights of privacy, speech of movement) or social groups (such as freedom important of association or assembly).
Democratic Development
Democratic Development is a process of rule making in which citizens obtain opportunities for political contestation and political participation. Political contestation refers to open rivalry and competition among diverse political interests. Political participation refers to the entitlement of citizens, considered as political equals, to be involved in choosing governmental leaders and policies. Democracy is a regime in which the authority to exercise power derives from the will of the people.
FDI, Aid &
Development Diplomacy
The Paris Declaration
The opening salvo of the Paris Declaration - Statement of Resolve – underpins the declaration by Ministers of developed and poor countries responsible for development and Heads of multilateral and bilateral development institutions, meeting in Paris in 2005. They resolved to take far-reaching and monitorable actions to reform the ways we deliver & manage aid as we look ahead to the UN review of the Millennium Declaration
“As in Monterrey, we recognize that while the volumes of aid and other development resources must increase to achieve these goals, aid effectiveness must increase significantly as well to support partner country efforts to strengthen governance and improve development performance. This will be all the more important if existing and new initiatives lead to significant further increases in aid. At this High-Level Forum on Aid Effectiveness, we followed up on the Declaration adopted at the High-Level Forum on Harmonization in Rome (2003) and the core principles put forward at the Marrakech Roundtable on Managing for Development Results (2004)".
They believed they will increase the impact aid has in reducing poverty and inequality, in-creasing growth, building capacity and accelerating impact. These corner stones of development diplomacy are to
- scale up for more effective aid, adapt and apply to differing country situations, specify indicators, timetable and targets, monitor implementation, partnership commitments, partner countries exercise effective leadership over their development policies and strategies and coordinate actions.
- Moreover, donors would base their overall support on partner countries’ national development strategies, institutions and procedures, donors align with partners’ strategies, donors use strengthened country systems and partner countries strengthen development capacity - public financial management capacity and national procurement systems.
- Finally it was to untie aid: getting better value for money, donors’ actions are more harmonized, transparent and effective, donors implement common arrangements and simplify procedures, complementarity: more effective division of labour, incentives for collaborative behaviour, delivering effective aid in fragile states, promoting harmonized approach to environmental assessments, managing resources and decision-making for results.
Where do we go from here in development diplomacy?
What is the role of development diplomacy in FDI and Overseas Aid negotiations? What are our diplomats expected to do in FDI and Overseas Aid negotiations?
Development Diplomacy is dependent on democracy which requires a plural set of political organizations, which promote and protect rules of peaceful political participation and competition. This is the basis on which
FDI & development aid negotiation can be facilitated
It is agreed that promulgation of policies and legislative measures alone are not enough to encourage the development of the private sector. Implementation of the policies in favour of the sector is very important. In a market economy, progress in industrialization is considered to come about with the development of financial markets and establishment of international banks is needed (Costantinos, 2015d)
Free movement of capital and labour through clear-cut and proactive national policies and procedures favourable to private sector development and improved access to credit facilities by lowering collateral requirements will improve service.
Stemming any the threats of under-investment (FDI) requires
- a disciplined diplomatic leadership motivated force that is required to produce results;
- Leadership teams that are committed and willing with positive attitude to facilitate the process of opening up greater opportunities for every citizen.
- The sector would require a proactive and innovative managerial and entrepreneurial team with capacities and will power.
- The crux of the challenge is
- to create, retains and put to productive use people with such qualities,
- to identify, sequence and execute policies that would enhance aggregate commitment, determination and capacities to motivate and utilize all segments of society.
Development Diplomacy & Nation Branding
For a quarter of century, the Western media brands Ethiopia as a famine-ridden basket case. What started with a rogue military regime is still a stigma that prevails in the media. In 1984, a famine began to strike Ethiopia with apocalyptic force.
This was the face of Ethiopia
until recently
Nevertheless, Ethiopia’s problem is not so much a problem of character defect or ethical failure as it is one of misunderstanding arising from decontextualising and dehistoricising social phenomena based on false analogies and false comparisons on the separation of meaning from social context, behaviour from cultural milieu, and action from social structures.
Judgments are based on representations especially the perception that the Western state, and its correlates, market society and bureaucratic organisation exist or ought to exist in Ethiopia.
Nation branding is a field of theory and practice aiming to measure, build and manage reputation of countries
Some approaches applied, such as an increasing importance on the symbolic value of products, have led countries to emphasise their distinctive characteristics.
How should recepient countries behave?
FDI & Aid can only be successful only if legal texts are applied to ensure full accountability, transparency and predictability of executive authority and building capacity . This assumes democratization, a process of institutional learning, in which state and societal organizations develop a new and stable set of mechanisms
The branding and image of a nation-state and the successful transference of this image to its exports - is just as important as what they actually produce and sell (True, 2006: 73–74)
These corner stones of development diplomacy are to
- scale up for more effective aid, adapt and apply to differing country situations, specify indicators, timetable and targets,
- donors would base their overall support on partner countries’ national development strategies, institutions and procedures, donors align with partners’ strategies,
- untie aid: getting better value for money, donors’ actions are more harmonised, transparent and effective
Democratic rule institutionalizes uncertainty. It can succeed if and when all the political actors accept this uncertainty as preferable to the rigidities of dictatorship.
Diplomatic leaders are responsible for breaking the boundaries of inward bound wisdom, of common sense (that is not common), of patterns of thinking and behaving, which, over the years, have built themselves into routines, which pacify people to dormancy.
Diplomatic leadership requires intimate knowledge of public policy analysis, formulation and management. An inspiring ‘job description’ of a diplomat must be not only the power over discourse but also their ability to shape morality, to determine what is socially acceptable, culturally sound and politically uplifting. Indeed, leadership is more than a job; it is a calling.
Policy analysis framework for Development Diplomacy in Human Security
How can Africa install a Rights Based Approach & Meritocratic Governance to meet the SDGs
How can Africa Mainstream Human Security & Human Development
- Freedom from Fear
- Freedom from Want
Issues for Discussion
- Does development diplomacy enter Africa as an external ideology, constructing and deploying its concepts in sterile abstraction from the immediacies of indigenous traditions and values?
- In the struggle over the establishment of democratic rules of political engagement, do leading parties equate the articulation of their partisan agendas with the production of broad-based concepts, norms and goals, which should govern development diplomacy?
- How could development diplomacy pursue its goals consistently and in varying contexts, but do so without resorting to a self-defeating, overly scripted and stage-managed political play? How could development diplomacy intentionality be process-based purposefulness?
- Has the application of the rules of the Washington consensus weakened the state to an extent that it was unable to transform its institutions into democratic ones?
- Has the Washington consensus ultimately succeeded in bringing about economic development and therefore created a more conducive environment for development diplomacy?
Thank you
- end poverty in all its forms everywhere
- ensure healthy lives, quality education,
- gender equality, access to justice,
- modern energy for all,
- sustainable economic growth,
- resilient infrastructure & industrialization,
- make human settlements inclusive,
- combat climate change
- revitalize the global partnership for SD
Much worse, the fact that Liberia, Sierra Leone and Guinea were in various forms and stages of civil strife and outright conflict destroys the state's capacity to respond to pandemics.
Sustainability of such
systems is predicated on the need to mobilize urgently nations and civil
societies to redirect national and international policies and resources to address the evolving Ebola crisis, its collateral damage and compelling implications
Macro-policy
Kenny Charles (2014) in his article “The Ebola Outbreak Shows Why the Global Health System Is Broken” states, WHO declared the West African Ebola outbreak an international health emergency.
The aura surrounding the
criminal negligence of the health sector by state development agencies and the international community is unforgivable. Creative new efforts need to be excreted to meet the challenges posed by pandemics head on and hence, processes and procedures need to be developed that would ensure a higher degree of political will to be translated into policies and strategies to control the impact of the pandemic based on concrete and evaluable plan of operations
- Furthermore, nation states that have been curved out of the reckless scramble for Africa has created polities that have spun off their axes. Countries such as Côte d’Ivore, Liberia, DRC and Sierra Leone that were once sovereign states are now under UN Peace keeping.
Globally, states recognise they need
- to enable rather than control,
- to facilitate rather than interfere,
- manage less but more effectively.
The legitimacy of the reform process underway will depend in important ways on it being reasonably honest, transparent and accountable (Costantinos, 2015a).
Development diplomacy is central to FDI & Development Aid
Where is Development Diplomacy Contingent?
costy@costantinos.net
Background music 'Meskerem' by Elias Negash