- Keynote Speech by H.E. Prime Minister Meles Zenawi in JICA International Symposium on “African Economic Development and Asian Experience”
- Keynote Speech by H.E. Prime Minister Meles Zenawi in AFRICA Symposiun [JETRO, METI and WB] “New Trend of Business in Africa: Towards Accelerating Economic Growth”
- Keynote Speech by H.E. Prime Minister Meles Zenawi in TICAD IV Plenary 3-1 Expanding Partnership, ASIA-AFRICA Cooperation
KEYNOTE SPEECHES BY H.E. MR. MELES ZENAWI, PRIME MINISTER OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA, DURING HIS EXCELLENCY’S VISIT TO JAPAN TO ATTEND TICAD IV CONFERENCE
Excellencies, Ladies and Gentlemen,
Our symposium today is designed to promote discussion on what African countries can do to sustain and accelerate the recent growth of African economies, which to a large extent is linked to current high global prices of commodities. We are among other things encouraged to look at “what role will the African governments play in addition to “getting the basics right” in order to expand the basis of economic development.” I find the phrase “getting the basics right” very interesting for two reasons.
First, the reigning policy orthodoxy in Africa reduces getting the basics right to simply getting prices right. The reforms that were adopted and/or imposed on Africa, since the 80’s, based on the so-called Washington Consensus strongly implied that all governments needed to do, all they should do was to get prices right and leave the rest of the development business to the market and the private sector. That policy orthodoxy is partly responsible for the two decades that Africa has lost in its development endeavors and therefore of the crucial things that need to be done is to scrap that orthodoxy as a failure and as unsuitable for developing countries.
I find the phrase interesting also because it implies that getting the basics right goes far beyond getting prices right. I am encouraged to make that inference because of the fact that among other things, the discussion is being held here in Japan. And we all know how Japan successfully developed. We know how the Tiger economies of Asia followed the Japanese pattern to development in the so-called flying geese pattern. These are the spectacularly successful experiences of development and they suggest that governments in developing countries need to do a lot more than getting prices right if they are to achieve fast, sustained and equitable growth. In other words the second most important thing that we have to do to accelerate and sustain our growth is to replace the Washington consensus with a pragmatic development strategy based on the experience of East Asia.
In East Asia governments have played an active and dynamics role to promote growth. They have done so not to stifle private economic initiative or cripple the market but to promote both by addressing market failures. Developmental states in East-Asia beginning with Japan have done so very successfully and there is a lot that we can learn from them. It can be argued that not every Asian country has had a successful developmental state and that African states are not all alike. That is indeed true. Not all African states can address market failures successfully because as the development economists would say not all of them have the right political economy. African governments will therefore have to calibrate their role according to their political economy and developmental potential. Having said that, I would hasten to add that no government that limits its role to getting the prices right will achieve sustained growth and transformation. That much we know from our experience over the past two decades.
Two areas of intervention that have been overlooked in the past appear to me especially important. The first area of intervention has to do with infrastructure. There cannot be sustained growth without adequate and pro-active investment in infrastructure. While new opportunities for private and private-public partnerships in infrastructure investments have been opened up, and while we need to explore and exploit these opportunities to the hilt, it is nevertheless true that without massive government involvement there will not be the necessary investment in infrastructure to sustain and accelerate our recent growth. This is all the more so because infrastructure investment in Africa has been ignored over the past two decades, and as soon as our economies began to grow our creaking infrastructure is holding the growth back and threatens to completely undermine it.
The other area for government intervention that I wish to highlight is what experts on Asian development have called technological capability accumulation. Ultimately development is more about such technological capability accumulation than capital accumulations and governments have a critical role to play here. They have to build and run most of the institutions that train the required manpower and the institutions that are required to promote the diffusion of new technology. This means that African governments have to go well beyond primary schools to create a comprehensive system of technical and vocational training and tertiary education system geared towards technological learning and diffusion. These are areas of public investment that have almost totally been neglected over the past two decades.
Your Excellencies, Ladies and Gentlemen,
African countries need the support and understanding of their development partners if they are to embark on a trajectory of sustained and accelerated growth. To me the most important help we seek is to be given the policy space so that we can learn from successful development experience and design and implement our own development strategies. We want the stifling embrace of our development partners designed to implement the neo-liberal paradigm to be relaxed so that we can think and act for ourselves.
The second most important help that we need from our partners is technical and financial support to dramatically increase our investments in infrastructure and technological capability accumulation. It is very interesting to note that the two emerging countries of Asia, China and India have prioritized these two areas in their partnership with Africa and have already began to pour billions in to the sector. It is also interesting to note that most analysts agree these are the very sectors where Japanese assistance has been most helpful to the successfully developing Asian countries. I am aware that Japan has in recent years been moving in that direction in its partnership with Africa and I deeply welcome that. I am also aware that the resources required are such that grant assistance to the sector, however much it is increased, will be totally inadequate. What is required is the mobilization of billions perhaps even tens of billions of Japanese finance through various credit facilities to really make a difference. I am confident that Japan has both the resources and the will for such a dramatic increase in resource flows.
Finally we need the global trading environment to be restructured in such a way that it is less inimical to our development than it has been so far. I am not calling for level playing field because under current circumstances that would be too much to ask. I am simply asking for the reduction and amelioration of the rules of the same to minimize their damage on our prospects. If that is done we will have a more equitable trade and investment regime that could provide the needed boost for our economic growth.
Excellencies, Ladies and Gentlemen,
Many of us here today have been attending TICAD conferences for many years and have been talking about learning from Asia’s development and accelerating our growth for almost as long as we have been attending these conferences. People are therefore entitled to ask as to whether we are serious about learning from Asia and accelerating our growth, and what we have done in that regard.
I can only speak for my government. My government has rejected the neo-liberal orthodoxy and designed its own strategy based on a pragmatic combination of lessons of the development experience of Asia, our own specific circumstances, and the rational elements of the reform programmes advocated by the international financial institutions. This was not easy and I have to admit we had to pay a steep price in order to be able to think and act for ourselves but we have done just that. As a result for five years now we have had Asian type growth. Our economy has been growing at over 11% for five years now and our exports have been growing at over 25% for the past five years and this was so not because we struck gold-yellow or black but in spite of the fact that so far we have had no luck in the mining sector.
I would be the first person to admit that five years of Asian type export driven fast growth proves nothing about the prospects for Ethiopia or the continent as a whole. We need to sustain such growth for at least a few decades before we can confidently say we are successfully learning from Asian experience. What I hope the example of my country shows is that we are serious about learning from Asia, that we are making serious efforts towards that, and that we are beginning to see a flicker of light at the end of the tunnel and as a result of our efforts to learn from Asia’s experience.
I thank you.
KEYNOTE SPEECH BY H.E. PRIME MINISTER MELES ZENAWI IN AFRICA SYMPOSIUN [JETRO, METI AND WB] “NEW TREND OF BUSINESS IN AFRICA: TOWARDS ACCELERATING ECONOMIC GROWTH”
Your Excellencies, Ladies and Gentlemen,
I have been asked today to speak on the theme of "New Trend of Business in Africa: Towards Accelerating Economic Growth" and to do so not in general terms but on the basis of a specific and successful business development involving close public-private collaboration. I have selected the growth of the floriculture industry in Ethiopia in the past few years to demonstrate our governments approach to collaboration with business in promoting growth.
Ethiopia is reputed to have the ideal conditions for growing flowers particularly roses. We are close to the tropics hence immune from extremely cold weather conditions. The vast majority of our people live in highlands of over 2000 meter above sea level and hence we are mostly immune from extremely hot weather conditions. Although there is land shortage in the highlands with around half a hectare per capita it is fertile and apparently ideally suited for the floriculture sector.
In spite of ideal climatic conditions Ethiopia did not have a working flower farm until 2000 and only three such farms until 2003. But the activities of these pioneers was enough to convince the government that it ought to provide comprehensive support to the sector and we developed a programme to do so together with the private sector involved in the industry represented by their association. After a few years of collaborate work the sector has began to take off since 2005. A joint survey conducted by Ethiopian and Japanese experts states that there were over 67 operational farms by 2007. The total number of such farms including those that were in the process of establishment by 2007 was well over 235. This dramatic increase in flower farms has been reflected in the export of flowers by Ethiopia. While we exported slightly more than 243 million flower stems in 2005 by 2007 this had grown to 915 million stems a growth of over 137% per year for the past three years. Our exports earnings from flowers have grown from slightly over 51 million US dollars in 2005 to 168 million dollars in 2007 achieving a growth rate of over 114% per year over a three year period.
Clearly then the floriculture industry has taken-off in Ethiopia since 2005 and the growth rate of the industry has continued and even accelerated in 2008 and is expected to continue to do so in the coming five years. Nearly all of the flower farms in the country have been established in clusters within a distance of about a hundred km from the capital city Addis Ababa. The government has promoted the establishment of new flower farm clusters outside of this area and a very promising new cluster is being established about 500 km to the north of the capital around a city called Bahrdar.
One of the most attractive characteristics of the industry is that it employs a lot of labour. Flower farms employ at least twenty people per hectare. In the highlands of Ethiopia where there is acute shortage of land and high unemployment, this is a very important characteristics indeed. The survey I mentioned finds that nearly 25 thousand workers have been employed in the already functioning flower farms. That number increased to over 50 thousand if we include the workers who have been employed in the establishment of new farms and the expansion of old ones. The indirect employment effect of the sector is also thought to be substantial. Over 60% of the farms are owned by foreigners and the sector has attracted a lot of attention, from Dutch, Israeli and Indian investors among others. With nearly 97% of the product exported as far a field as Russia and Japan the sector is also becoming a significant foreign exchange earner for the country.
The success of the sector can be attributed largely to the close and collaborate relationship established between the government and the businesses in the sector. Our officials in the Ministry of Trade and Industry meet with the members of the flower industry association every month to discuss issues of mutual interest and I meet them at least two to three times a year. We develop a common plan for growth of the sector on the basis of which both the government and the businesses in the sector develop their specific plans consistent with the tasks assigned to them by the common plan.
Our government provides comprehensive support to the sector in financing, training, logistics and regulatory issues. We provide up to 70% of their capital through loans provided by the government owned development bank. We give them income tax holiday of up to five years and exempt them from VAT tax. They are also exempted from import duties for capital goods and inputs that they need for their farms.
We provide logistical support too. We have made sure that all farms have access to the internet and to the electricity grid. As both utilities are owned by the government, the utilities have had been asked to promote the interests of the sector as opposed to immediate profits for themselves. We have built a modern cold storage facility in the airport to accommodate their logistical requirements and are planning to expand the facility in partnership with the private sector to cater for the accelerating growth of the sector. The fact that we have the most successful publicly owned Airline in Ethiopia has also enabled us to provide Air cargo services at prices designed to help develop the sector. Our Airlines is currently radically expanding its Cargo service to cater for the growth in the industry.
We have also worked in collaboration with the industry association to develop minimum acceptable environmental and labour standards in the sector. After extensive discussions on the matter with all stake holders the standards have been set and training on the standards is being given to all stake holders in close cooperation with the industry association with the view to speedy implementation of both standards.
Most of the labour requirement for the farms is that of unskilled labour but it also employs significant number of highly skilled employees. We have established a department in one of our universities to train the necessary skilled manpower for the sector and this is already beginning to impact the sector positively. In the meantime, the farms are allowed and even encouraged to hire foreign skilled workers on a long-term contract basis. We have also recently established a research center in collaboration with the industry to develop new varieties of flowers to the sector. Last but not least the government has provided land on concessional long-term basis and facilitated lease contracts on land between flower farms and local farmers.
The sector has provided gainful employment for tens of thousands of our citizens and we expect this to grow to well over a hundred thousand over the next three years. It has earned the country millions of dollars in foreign exchange and we expect this to grow to well over 600 million dollars per year over the next three years. It has engaged the government in fruitful dialogue, has by and large strictly adhered to the laws and regulations of the country. In other words this has been a truly win-win partnership between the government and the private sector.
Unfortunately no Japanese flower farm has been established in our country. The only Japanese flower garden in our country is the Japanese garden in our National Palace which was built by the Japanese government because of the friendly relations between your imperial family and our former imperial family. While this garden was recently renovated and visited by former Prime Minister Koizumi when he visited our country, we need the Japanese private sector to follow the lead of the imperial family and invest in the floriculture industry. Although our flower exports to Japan is increasing I believe there is a lot of room for improvement here and would like to encourage Japanese firms to establish marketing links with our flower farms.
While I have talked extensively of the flower industry, I wish to stress that the sector is unique only in the speed of its development. We have established similar partnership with the private sector in other sectors too. Indeed, the establishment of such collaborate relationship to accelerate growth is one of the valuable lessons that we have learned from the successful development experience of Asia and we have tried to emulate it and adopt it to our own circumstance. It is thus not a matter of accident but a matter of well considered policy choice made by the government that we have developed such a partnership with the floriculture industry and other sectors. I wish to assure all Japanese businesses who wish to invest in our country in any sector will be welcomed as most valuable partners in our government’s war on poverty and will be given comprehensive support and encouragement along the lines that I have outlined earlier on when discussing the development of flower farms in Ethiopia.
I thank you.
KEYNOTE SPEECH BY H.E. PRIME MINISTER MELES ZENAWI IN TICAD IV PLENARY 3-1 EXPANDING PARTNERSHIP, ASIA-AFRICA COOPERATION
Your Excellency Mr. Yasuo Fukuda, Prime Minister of Japan
Excellencies, Heads of State and Government
Ladies and Gentlemen.
It is a source of great pleasure for me to be here in Yokohama to participate in the Fourth Tokyo International Conference for African Development. I wish to express my sincere gratitude to the Government of Japan for the wonderful reception and the typically Japanese warm hospitality accorded to me and my delegation. I also wish to express my thanks and congratulations to the co-organizers for the stellar work they have done in preparing this conference.
TICAD was one of the first international fora to bring Africa and its partners together. The establishment of TICAD is thus very significant not only because it was a trailblazer for many similar fora that followed, but also because it happened when Africa faced the risk of marginalization and African issues had taken the back-burner on the global agenda.
TICAD provided a forum for discussion among Africans and Asians and in particular for sharing experiences of development. This was very significant because of Asia’s success in its development endeavours and the failed economic reform programs that were being adopted by Africa and /or being imposed on it. TICAD thus served to promote pragmatism and ownership in economic development policy formulation rather than orthodoxy and a one-size fits all approach, which was the dominant approach in Africa.
TICAD also provided the forum for engagement of the business communities of the two continents and the promotion of trade and investment between them. This again was very significant, because Africa was then considered fit for only charity and aid rather than trade and investment.
The global situation has changed fundamentally since the first TICAD conference. The successful development efforts of Asia which started with Japan, followed by the so-called Asian Tigers has now caught up with the two sleeping Giants of Asia, India and China. The center of gravity of global economic dynamism has now very clearly and visibly shifted to Asia. This change of world historical significance suggests that the relations between Asia and Africa have to change accordingly.
Partly related to the changes in Asia, Africa’s circumstances have also changed. African economies are now growing at their fastest rate in more than a generation. African’s natural resource wealth is now actively sought after as a result of buoyant commodity prices. The risk of marginalization of Africa has all but disappeared. Our partnership with Asia must of necessity take stock of these changes. The Fourth TICAD conference has a unique opportunity to do so.
I think such an update of the TICAD process has to start with the recognition of the complimentarily of our continents, which should constitute the basis of a new and strategic partnership between us. Our interest in Asia is not based merely on seeking aid or even short-term trade and investment opportunities. Asia’s interest in Africa is not based merely on the search for raw materials and geo-strategic advantages. Our strategic partnership is based on even more fundamental interests and considerations. Africa seeks partnership with Asia to promote common prosperity on a long-term basis including the technological advancement and industrialization of our continent. We seek partnership with Asia to promote a more inclusive and fairer globalization, including a fairer system of global governance. We seek such partnership because we are deeply convinced that these goals serve the interests of both Africa and Asia and can thus serve as the basis of a new strategic partnership.
I am very encouraged to note that such a revitalization of TICAD has been envisaged by the preparations made by the Japanese government and the other co-organizers of this, fourth conference. Indeed it could not have been otherwise, as the trailblazer in Asia Africa partnership could not lag behind newer partnerships that Africa has established with a number of Asia countries in the recent past. I think all that remains for us to do now is to elaborate more clearly and in greater detail the strategic partnership that is implied by a revitalized TICAD and to implement the commitments we make during the conference in a diligent manner, even more so than has been the case in the past.
Your Excellency Prime Minster Yasuo Fukuda,
Excellencies, Ladies and Gentlemen.
I would like to take this opportunity to thank the Japanese government for its support to NEPAD. Japan has been among the earliest and most consistent supporters of NEPAD. NEPAD is the African Union’s programme of development and continental integration and as such is Africa’s roadmap to its future. It is the basis of Africa’s strategic partnerships with the rest of the world. A revitalized partnership between Asia and Africa can thus not be considered outside the framework of the revitalization of the implementation of NEPAD. In my capacity as the Chairman of the Heads of State and Government Implementation Committee of NEPAD I wish to call on the Japanese government to continue its support for NEPAD and wherever possible to augment such support and accelerate its implementation.
I wish to conclude by thanking you Mr. Prime Minster, and your government for launching TICAD and your support for Africa’s development endeavours.
I thank you.