I. Post-Independence Initiatives, 1960-1980

Early post-independence economic initiatives in Africa were driven by an effort to overcome perceived deficiences from the colonial legacy. Emphasis was given to the development of infrastructure, education, and health, along with varying degrees of effort to implement the UNCTAD Latin American policy of import-substitution industrialization. In addition, some efforts were made to consider enlarged political reconfigurations in Africa, notably those initiated by Kwame Nkrumah in West Africa and by the East Africa Economic Community consisting of Kenya, Uganda, and Tanzania. As long as the real price of primary commodities on which many African countries depended, import subsitution offered a panacea for rapid industrialization. Faced with the collapse of primary commodity prices during the 1980s, African countries found that import subsitution policies were unsustainable as governments faced mounting external, largely publicly financed, external debt. As debt reschedulings increased in frequency, African countries faced the reality of growing dependence on external finance, while at the same time, traditional exports from agriculture experienced losses in productivity to East Asian producers and as developed countries (notably those in the European Community, the United States, and Japan) pursued extensive protectionist policies in agriculture that made it increasingly difficult for African countries to increase their export earnings. Despite the increasingly difficult policy environment, many African countries made notable strides in expanding educational enrollments, improvements in public health, and modest increases in transport and the information infrastructure. Once sustainable funding was no longer available, many countries began to experience reverses, though it was not initially obvious that alternative measures would be needed.

II. Structural Adjustment and African Responses, 1980-2000

Structural adjustment (as defined by the World Bank) and conditionality (as defined by the IMF) defined a framework by which African countries were pressured to dismantle inefficient para-statal enterprises, reduce barriers to trade, and increase real economic incentives to farmers to raise agricultural production and exports. The World Bank's Berg Report of 1981 provided the focal point of World Bank and donor country initiatives. In response, many African countries resisted economic reform, partly because political elites had established regimes around an elaborate system of patronage, and in which corruption abounded. Part of this legacy derived from the Cold War in which external powers provided substantial amounts of foreign aid with few mechanisms for public accountability and in which African countries faced mounting external debts once such aid, which was largely in the form of loans, came due. With the fall of the Soviet Union in 1989-1991, increased external pressure led to reductions in low-accountability foreign aid, and in which increased emphasis was given to private sector investment and a political transition to democratic regimes with observable regular elections.

As in East Asia, the increased emphasis on private sector capital flows has come with its own set of problems. East Asian countries, particularly the successful "tiger" economies of South Korea, Singapore, Malaysia, and Hong Kong, had a long established practice of promoting high rates of saving, as well as the development of indigenous capital market institutions. However, as these economies opened their borders to international capital flows, they faced increased volatility in their foreign exchange transactions, and went through a sudden collapse in 1997 as real estate collateral loans failed in a number of countries. Although these countries have largely recovered from their losses, the experience points to the need for transparent and efficient financial institutions to manage risk in tradable commodity forms. In contrast, few countries in Sub-Saharan Africa have the depth and breadth of these financial institutions and instruments. Globalization for Africa thus requires first and foremost the creation of suitable instiutions that can effectively manage risk.

When globalization falters, it produces an inevitable impulse to retreat back within internal borders. Protests at the Seattle WTO meeing in 1999 illustrated the extent of frustration over the uneven benefits of globalization, and the attendant levels of risk that interdependent economic ties bring about. Despite these risks, African countries have largely rejected the temptation to withdraw, or delink, as Samir Amin has often proposed, and have moved in favor of renewed engagement, notably through several initiatives of the Organization of African Unity, African Heads of State, and related initiatives. The most dramatic of these initiatives was the dissolution of the Organization of African Unity in 2001 and the creation of the African Union. Inspired by the transformation of the Common Market to the gradually expanding European Union, African leaders have placed renewed emphasis on regional initiatives that could facilitate inter-regional trade and investment as well as strengthen African economic productivity in global markets.

III. The New Partnership for Africa's Development, 2001

Faced with the reality of globalization, The New Partnership for Africa's Development articulates an externally focused strategy that draws on Africa's historical advantages with a commitment to expand its importance in the global economic community. Key initiatives include:

1. Emphasis on the creation and nurturing of institutions of civil society, including global governance in an environment of transparency and accountability that recognizes partnership among all people. This includes respect for global standards of democracy based on political pluralism with fair, open, freee and democratic elections on a periodic basis.

2. Emphasis on the evolution of global financial architecture that rewards good socio-economic management.

3. Priority to the peaceful resolution of conflicts through a conflict resolution mechanism to be promulgated by the African Union. This includes emphasis on support for human rights and the promotion of the rule of law based on the AU Economic Governance Initiative.

4. Restoring and maintaining macroeconomic stability, through appropriate standards and targets for fiscal and monetary policies, and introducing appropriate steps to achieve these standards.

5. Institution of transparent legal and regulatory standards for financial markets, and auditing of private companies and the public sector

6. Revitalization and extension of education, technical training and health services, with high priority given to HIV/AIDS, malaria, and other communicable diseases.

7. Promotion of the role of women in social and economic development through expanded education and training, credit and job creation, and participation in political and economic life.

8. Bujilding the capacity of states in Africa to set and enforce the legal framework as well as the maintenance of law and order.

9. Promoting the development of infrastructure, agriculture, and diversification into agro-industries and manufacturing to serve both domestic and export markets.

IV. NEPAD Goals (based on a 7 percent annual GDP growth rate target)

1. A 50 percent reduction of the proportion of people living in extreme poverty between 1990 and 2015.

2. Universal primary school enrollment by 2015

3. Elimnation of gender disparities in primary and secondary school enrollments by 2005

4. Reduction of infant and child mortality ratios by two-thirds between 1990 and 2015.

5. Reduction by 75 percent of maternal mortality ratios between 1990 and 2015

6. Implementation of national strategies for sustainable development by 2005 to reverse the loss of environmental resources by 2015.

V. Unresolved Issues

1. Debt reduction to sustainable levels must be accompanied by the expanded creation of local capital market institutions.

2. No mechanism exists for the establishment of regular democratic elections with transparency and accountability by all members of society.

3. There is a need for an effective export strategy that can facilitate not only existing external debt but also underwrite the renewed commitment to infrastructure and human resource development.

4. Large gaps exist between the articulation of goals and the means for their realization, notably in health, education, communications. How goals will be implemented will require the development of strategic plans that avoid the rigidities of bureaucratic state-driven planning of the past and the uncertainties of market dynamics where tradable risk assets are largely nonexistent.

5. Specific emphasis must be given to the reduction in barriers for African exports in the developed countries that consume the bulk of Africa's products. This includes measurable progress in the reduction in agricultural subsidies in the European Union and the United States.

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