November 3, 2008
A joint meeting of The Empire Club of Canada and The Canadian Club of Toronto
F.W. de Klerk
Chairman of the Global Leadership Foundation and Former President of South Africa
The third world—is it sinking or shrinking?
Chairman:Jo-Ann McArthur,President, The Empire Club of Canada
Head Table Guests
Rev. Dr. John S. Niles: Senior Minister, St. Andrew's United Church, Markham
Daniel Jacobs: Grade 12 Student, North Toronto Collegiate Institute
Helen Burstyn: Chair, Ontario Trillium Foundation
Effie Triantafilopoulos: Lawyer
Alison Loat: Executive Director, Samara Project
Randy Gossen: Vice-President, Global Business Relations, Nexen Inc.
Sir Robin Christopher: Secretary General, Global Leadership Foundation
The Right Hon. Joe Clark: GLF Member, Former Prime Minister of Canada and Former Foreign Affairs
Minister Dr Isa Odidi: Chairman and CEO, IntelliPharmaCeutics Corp.
Dr. Amina Odidi: President/COO/Chief Scientist, Intellipharmaceutics Corp.
Maureen McTeer: Author, Lawyer, Adjunct Professor, University of Ottawa School of Law.
Mrs. Elita de Klerk: Wife of F.W. de Klerk.
Introduction by Jo-Ann McArthur
Our honourable head table guest Joe Clark addressed the Empire Club back in 1986 as Secretary of State for External Affairs. He spoke of the need to develop common policies to seek peaceful change in South Africa. A lot has happened in South Africa since then and today he is a member of the Global Leadership Foundation (GLF), an NGO founded in 2004 by the former State President of South Africa and Nobel Prize laureate F.W. de Klerk.
Mr. De Klerk's Global Leadership Foundation is composed of a number of former statesmen, ex-presidents and prime ministers from around the world. It exists to share the experience of its members so that mistakes of the past are not repeated and offers leaders of emerging democracies impartial advice, working across political and ideological lines. They do this confidentially and with no publicity, ensuring that the leader who is helped can take all the credit for a successful initiative, strengthening and reinforcing his credibility.
Mr. De Klerk shared the Nobel Peace Prize in 1993 with Nelson Mandela “for their work for the peaceful termination of the apartheid regime, and for laying the foundations for a new democratic South Africa.”
Mr. De Klerk continues to lay the foundation for a better world. It is a great honour to welcome him to our podium today.
F.W. de Klerk
There is a tendency to be pessimistic about the future of mankind, now that we are in the grip of the worst financial downturn since the Great Depression. Some people even question the wisdom of continuing to follow free-market principles in the manner in which we allocate resources and manage our economies.
One of the greatest challenges presented by globalization will be its ability to bring benefits to all mankind, including the so-called Third World. Future planetary stability will be affected by the degree to which the world succeeds in closing the gap between the poor and rich nations and in generating sustainable growth that works for all.
I believe that we are making substantial progress in this direction. The reality is that the past 50 years have witnessed the greatest progress made by human beings in the vast sweep of our history. During this period, more people, particularly in the Third World, have escaped the stranglehold of poverty than ever before. Literally billions of people have achieved decent standards of living, education and well-being.
In my view the Third World is clearly not sinking. Despite the continuing failure of some parts of the under-developed world to join in the general march to prosperity, there can be no doubt that the Third World is, in fact, shrinking.
The United Nations Human Development Index is perhaps the best way to measure the progress that countries are making on the road to development. It is a composite of three main elements:
• per-capita income;
• life expectation at birth; and
These three factors pretty well describe the core condition of mankind:
• how prosperous they are;
• how healthy they are; and
• how well educated they are.
During the 30 years between 1975 and 2005 China’s Human Development Index improved from .53 to .77, and India’s from .42 to .62—on a scale where 1 represents the highest development. What this means in layman’s terms is that life in both these countries is more than 45 per cent better now than it was 33 years ago. The same is true of a great swathe of humanity from Egypt to the Philippines. Life has been getting better all the time.
There can also be no doubt that globalization has provided much of the motive power for this improvement in the human condition. Global trade—driven by new technologies and lower tariffs—increased from $1.6 trillion in 1970 to more than $10 trillion in 2005. All this has been translated into more jobs and higher wages for workers all over the former Third World.
Life has also been immeasurably improved by new technologies, better medicines and health care and better food. Two billion people now have cell phones and hundreds of millions in the developing countries have access to the Internet.
Asia is rapidly beginning to move back toward the dominant position that it held in the global economy before the 19th century. In 1820 it produced 58 per cent of the planetary product. By 1950, when most of Asia was characterized as being part of the Third World, its share had declined to only 18 per cent. It is now 38 per cent and is expected to increase to 52 per cent by 2030. What this means is simply that within a couple of decades a great and growing majority of the world’s population will have joined the first world.
Unfortunately, this is not true of all parts of the Third World.
Improvement in the Human Development Index has been much slower in Africa than in Asia and Latin America. In some populous countries like the Democratic Republic of the Congo, it has actually declined over the last 33 years. The reality is that, without exception, the bottom 20 countries on the Human Development Index are all in Africa, and African countries comprise 38 of the bottom 50.
Between 1960 and 2000 the Human Development Index in the developing world as a whole increased from 0.260 to 0.655. However, in Sub-Saharan Africa it increased only from 0.2 to 0.486. These are dry statistics, but they represent very real human deprivation in the form of grinding poverty, disease and ignorance.
This is where the Third World continues to exist and it is here where the world’s attention and assistance will increasingly have to be focused.
However, if we look at Africa with greater discernment we shall also see positive signs of hope and development.
There are, indeed, too many countries that continue to conform to the African stereotype of poverty, conflict and tyranny. However, such states conform to the stereotype not because they are African, but because poverty, tyranny and conflict go hand in hand throughout the world and throughout history and not just in Africa. The nine countries in Africa that have experienced the bitterest conflict during the past decade have one thing in common: they are all extremely poor. The average per-capita GNP incomes of these countries are less than US$200.00.
Poverty and the state of political development also go hand in hand: the average per-capita GNP income of the sub-Sahara African countries that are classified as “not free” is US$352; that of the countries that are regarded as being “partly free” is US$552; and that of the free countries is US$2,115.
The problem, accordingly, is poverty—and not Africa.
The challenge for the world—and most notably for Africa itself—is to address the root causes of the vicious cycle of poverty, conflict and tyranny on its continent.
It is a challenge that Africa has accepted.
In July 2001, African leaders assembled at the 37th Summit of the Organization of African Unity (OAU), adopted the basic framework document for the New Partnership for Africa’s Development (NEPAD). According to them, NEPAD’s objective was “to consolidate democracy and sound economic management on the continent.” Through the NEPAD program, they made a commitment to the African people and the world to work together in rebuilding the continent. They pledged to promote peace and stability, democracy, sound economic management and people-centred development. They promised that they would hold each other accountable in terms of the agreements outlined in the program.
Almost seven years have elapsed since then. The question is how is Africa progressing with its goals and in particular what is the state of governance in Africa today.
The first goal that the African leaders set themselves was to end the conflicts that afflicted the continent. They committed themselves to strengthening mechanisms for conflict prevention, management and resolution at the sub-regional and continental levels, and to ensure that mechanisms are used to restore and maintain peace.
They chose wisely. The reality is that without peace and stability, there can be no economic and social development; and without economic and social development it is difficult to entrench viable democratic systems and systems of good governance. Without viable democracies and good governance it is often difficult to maintain peace.
These elements—peace, development and democracy—constitute a virtuous circle in which each element reinforces the others. However, if there is any beginning to the circle, it almost always lies in the need for peace and stability. As we have seen in Africa’s war zones, little can be accomplished without them.
The root causes of conflict in Africa are also not difficult to identify. They lie in poverty, tyranny, poor governance and inadequate economic policies, and in the inability of people from different ethnic and religious communities to coexist within the same societies.
Together, these elements comprise a “vicious circle,” which during the past 20 years has led to the deaths of more than six million people on the continent and to unimaginable poverty and brutality.
Most of the countries that have been plagued by civil warfare have also been among the poorest in terms of per-capita income. They have also had the most oppressive and incompetent regimes, and nearly all the conflicts have been exacerbated by tensions and hostilities between ethnic and religious communities that were artificially lumped together in the same geographic areas by European imperialists.
The way to address the vicious cycle is accordingly to promote the virtuous circle—the cycle of democracy and good governance, economic development and the circumstances necessary to enable different communities to coexist in the same societies.
The second goal that NEPAD set itself was to promote democracy.
African leaders committed themselves to promote and protect democracy in their respective countries and regions by developing standards of accountability and transparency and participatory democracy at the national and sub-national levels.
What progress has Africa made with the promotion of democracy?
Much of sub-Saharan Africa has, during the past 15 years made heartening strides toward democratic government. Freedom House, a New York-based organization which monitors the state of civil and political rights in countries around the world, now classifies 11 of Africa’s 52 states as being “free” multi-party democracies (compared with eight only a few years ago); another 23 are regarded as being “partly free” and 18 as “not free.” Interestingly, despotism is not primarily a sub-Saharan phenomenon: four of the five African countries north of the Sahara are classified as “not free.”
Other aspects of good governance have proved to be more elusive particularly in the areas of accountability, transparency and macro-economic stability.
African governments also committed themselves in their NEPAD undertakings to creating an environment in which economic growth could take place. According to Tony Blair’s Commission for Africa, African governments needed to improve the integrity of their legal systems and upgrade their physical infrastructure. They had to address problems of poor governance and corruption and had to stop over-regulating the private sector. They needed to stimulate trade through greater regional integration and the lowering of tariffs and non-tariff barriers.
How have they fared?
Corruption is still a major problem in most African countries. According to a survey conducted by Transparency International in 2006, 35 per cent of Africans reported that they or someone living in their household had paid some form of bribe during the preceding 12 months. The comparative responses for North America and the European Union were 2 per cent; for Asia and the Pacific 7 per cent; for the newly independent Asian and European countries 11 per cent; and for Latin America 17 per cent. Interestingly enough, the figure for South Africa was only 5 per cent.
There are also continuing problems with macro-economic policy and good governance.
The Economic Freedom Network carries out an annual assessment of the full range of governance factors in its annual World Economic Freedom Report. The report grades countries around the world according to more than 45 different factors, including taxation, trade and monetary policies, law and order, labour flexibility, market regulation and the independence of the judiciary.
According to the 2006 report Botswana has the freest economy in Africa. Nevertheless, it ranks only 35th in the world. Only three African countries are listed among the 50 freest economies in the world. South Africa is placed 53rd. Nineteen of the world’s 30 least-free economies are in Africa. All this has serious implications for NEPAD’s commitment to good governance and to its goal of promoting development.
There are some facets of economic policy that African countries must address as urgently as possible. They must stop the flight of capital from the continent. Although Africa rightly complains about its crippling debt burden, the reality is that US$285 billion left the continent between 1970 and 1996. Each year Africa loses another US$20 billion, which means that for every dollar lent to Africa in recent decades 80 cents has returned to the developed world.
Africa must liberalize its own tariffs, which are among the highest in the world. It must expand intra-regional trade which now accounts for only 10 per cent of its total trade compared with intraregional trade in Europe and North America which accounts for 67 per cent and 40 per cent of their total trade respectively.
At the same time there is a great deal that the international community can do to make the economic playing fields more even.
Steps should be taken to increase Africa’s diminishing share in global trade, which has declined from 2 per cent in 1980 to 1 per cent in 1999. Although First World nations are quick to give lip service to the need to help develop African economies, they are often ruthless when their own interests are adversely affected. The tariffs that they imposed on agricultural imports from Africa are four to seven times higher than the tariffs they impose on manufactured exports.
The developed countries continue to subsidize their farmers to the tune of US$280 billion per annum. By so doing they make it difficult for Africans to compete in the one area where they have a competitive advantage.
Africa needs two things—a fair break from the rest of the world and the determination to address its own problems.
The New Partnership for Africa’s Development is intended to do precisely this. It has identified the problems and has prescribed the appropriate remedies. Africa’s main challenge now will be to turn NEPAD’s programs into the reality of the African century that has been so passionately advocated by former President Mbeki.
Africa is already beginning to reap the rewards of the new policy directions proposed by NEPAD. Average growth in Sub-Saharan countries rose to 5.4 per cent in 2006. Much of this may be ascribed to the commodities boom, and, in particular, to increased oil exports. However, according to the International Monetary Fund a great deal is also the result of improved governance and more appropriate economic policies. As a result, foreign direct investment almost doubled from 1.15 per cent of world GDP in 1995 to 2.23 percent in 2005.
Africa needs to follow the NEPAD road map out of the Third World:
• It needs more progress with the promotion of democracy. Although it now has 11 fully functioning democracies on the continent, the reality is that there are still 18 dictatorships in Africa.
• It needs to apply the Peer Review mechanisms more fearlessly. This will not happen if African leaders continue to avoid criticism of regimes like that of Robert Mugabe of Zimbabwe who is in clear breach of everything that NEPAD proclaims.
• Africa will not break free from the Third World unless its governments continue to adopt policies that will liberate and energize their economies and lead to much greater intra-regional trade.
• It will not achieve its goals unless it can ensure basic standards of governance and can root out corruption.
The world cannot allow a tenth of its population to continue to wallow in the grip of Third World poverty and deprivation. The future of Africa depends on its ability to establish peace and stability, to promote genuine democracy and to ensure basic standards of good governance.
This is the formula that will ensure that Africa will also succeed in leaving the Third World behind. I am confident that it will do so.
I look forward to a new era in our globalizing world when there will no longer be such enormous divisions between the rich and the poor, between the developed and the undeveloped, and between the free and the unfree.
I look forward to an era when there will no longer be a Third World.
The appreciation of the meeting was expressed by Helen Burstyn, Chair, Ontario Trillium Foundation.