Global Economics: For Success Post-2015 Development Agenda Must Be Anchored On Genuine Partnership
[Commentary On Global Development]
During the 68th session of the United Nations General Assembly, global partnership occupied center stage in formal and informal discussions.There was a general feeling that post-World War II partnership between the north and the south has been characterized by power relations – not partnership among equals.
The politically and economically powerful north has dictated terms of engagement to the politically and economically weak south. Consequently, the interests of the north have been pursued at the expense of those from the south. There are many examples to confirm the unequal relationship.
During the 1973-75 negotiations between the European Economic Community (EEC) now the European Union (EU) and the ACP states (African, Caribbean and Pacific) leading up to the Lome I Convention that took place in Brussels, Belgium, the delegations from the ACP countries had hoped that as independent states, they would negotiate all development issues as equals. Kwame Nkrumah had preached that after political independence, the newly independent countries would be empowered to negotiate economic independence.
As the negotiations proceeded, it became clear that the powerful EEC's representatives would not accept to negotiate as equal partners. Instead they would determine the agenda. Consequently, the EEC Common Agricultural Policy (CAP) was never discussed. Being agrarian societies, agriculture was an area of great interest to the ACP states where they had hoped to negotiate and obtain improved access to the EEC markets on fair terms.
Also negotiations did not go far on ACP’s export of manufactured products to the EEC markets. The EEC negotiators argued that the ACP states had a comparative advantage in producing and exporting commodities while the EEC had a comparative advantage in producing and exporting manufactured products, concluding that the status quo should be maintained because it was the best for both parties.
In case of considerable drop in the foreign exchange earnings from the sale of commodities the difference would be made up through compensatory financing known as a stabex arrangement. Thus, the Lome I Convention represents a case of the wealthy and powerful EEC influencing the process and outcome of the negotiations that disadvantaged the poor and weak ACP partners.
The second case of unequal partnership relates to the design and implementation of stabilization and structural adjustment programs (SAPs) that came into force in the 1980s and terminated in 2009 because they failed to deliver as expected. The trickle down mechanism designed to equitably distribute the benefits of economic growth did not work.
Because they were saddled with macroeconomic imbalances including high inflation, external debts and budget deficits, the powerful north imposed "shock therapy" programs on the weak south.
In Uganda the ruling National Resistance Movement (NRM) government was advised to enter into an agreement with the International Monetary Fund (IMF) before receiving aid. In its 1987-88 report, the New African recorded that an official from the north “echoed the opinion of most major creditors that the solution to Uganda’s problems depended on reaching an agreement with the IMF”.
As part of the negotiations for the new arrangement, the minister of finance and governor of the central bank were replaced and the ministries of finance and planning and economic development were merged into one. The home-grown and popular ten-point program based on the mixed economy model was abandoned and replaced by a shock therapy structural adjustment program that came into force in 1987. The IMF supported program would be supervised by foreign managers although there were capable qualified Ugandans at home and abroad.
These two examples demonstrate that post-World War II global partnership has been characterized by an exercise in power relations with the stronger imposing its will on the weaker partner. The 15 years from 1980 to the mid-1990s dominated by the imposed structural adjustment programs went down as the lost decade and-a- half for Africa.
Determined to chart a new and genuine partnership, African leaders constructed the New Partnership for Africa’s Development (NEPAD) which has received strong support by the G8 and the international community. This partnership, based on equal relations and compromise, will be incorporated into the post-2015 agenda as reaffirmed during the NEPAD week that ended on October 25 with statements in the United Nations General Assembly Hall.
Eric Kashambuzi, UN Foundation
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