GRIPS-ODI-JICA Joint Seminar

African Growth in the Changing Global Economy—How to implement the TICAD IV promises for sustained growth?—

Seminar Report

The GRIPS-ODI-JICA Joint Seminar was held on 27 November 2008, with over 100 participantsfrom diverse background—African Ambassadors and diplomats, researchers, private sector andNGOs, policy makers) and practitioners who are interested in the African development. The seminar
was organized by the GRIPS Development Forum and the JICA Research Institute, in collaboration
with the Overseas Development Institute (ODI)—British leading think-tank on international
development—and African embassies in Tokyo.
As opening remarks, on behalf of the Joint Seminar Secretariat, Prof. Izumi Ohno greeted
participants and explained the background for the seminar. She stressed the importance andrelevance of this seminar to confirm and advance Japan’s commitment to Africa development madeat the TICAD IV and the G8 Summit earlier this year, especially at the time when the global
economy faces uncertainty. The establishment of new JICA is an important push to Japan’s effective
support to African development.

Part I:How should Africa cope with global financial crisis?

Presentation 1: Simon Maxwell, Director, ODI, UK“Shaping the future, two faces of African development”
Mr. Simon Maxwell began by celebrating UK-Japan collaboration, especially the relationships
between ODI, JICA and GRIPS. He assessed that Japan has made considerable contributions to thedevelopment agenda at the TICAD IV and the G8 Hokkaido Toyako Summit held earlier this year,
especially the emphasis on Africa, the commitment to growth, and the over-arching intellectual
framework provided by Mrs. Ogata’s work on human security. Japan had also taken a leadership roleon climate change. There was a challenge, however: He wondered whether Japan needed to make thecase for development more powerfully, given the current inward-looking attitude towards
development among Japanese politicians and bureaucrats.
He explained that Africa has two different futures—“happy” and “sad” — and that research institutes
such as ODI, JICA Research Institute, and GRIPS, would need to change the content of theirresearch programmes in either scenario. Beginning with the less optimistic scenario, the current

1financial crisis will lead to recession rolling out to developing countries, including Africa, through“transmission belts” (trade, FDI, portfolio flows, remittance, aid, etc.). To tackle these challenges,
research institutes should quickly offer stories/scenarios, learning from the hard lessons from theStructural Adjustment experiences. It took ten years to change the policy direction of the Bretton
Woods institutions. At that time, a story about the need for “Adjustment with Human Face” was very
important. A similar emphasis was needed during the current crisis.
There are more optimistic views. Africa has been transformed over the last decade, supported by awide array of initiatives such as MDGs, NEPAD, debt relief, good governance, aid effectiveness.
Certainly we need to invest more in good governance in Africa, and donors need to respect theircommitments made at the Gleneagles G8 Summit in 2005. (Donor pledges are below 30% of thetargets, and Italy, which will host the 2009 G8 Summit, already announced a 58% cut in its aid
budget.) Still Africa’s recent growth (averaging at 5-6% per year) is good and a significant step
toward achieving poverty reduction. The recent growth has also enabled some countries—Senegal,
Ghana, and Uganda for instance—to approach middle-income country status. Thus, important
progress is being made.
In this more optimistic scenario, the development agenda changes and again presents challenges toresearch institutes. There are three big challenges, over and above the MDGs. First the entry of
China into the world economy requires analysis of a new globalization, especially the manufacturingprospects for poor countries. Second, development, security and foreign policy are increasingly
linked, especially in fragile states where aid is most likely to be concentrated. Third, attention has
begun to shift from national development policy to regional and global public goods: the financial
crisis and climate change are two examples. Each of these themes presents new research challenges.
To put this in context for research institutes and think-tanks, they should be mindful of three Cs: (1)extend the coverage; (2) strengthen the capacities of developing countries and researchers; and (3)communicate and disseminate quickly the outcomes of their work. On the latter, ODI encourages thestaff to use the Policy Brief rather than conventional instruments, for example, lengthy research
papers.
In concluding his presentation, Mr. Maxwell emphasized his belief that Africa would have positive
future despite the current difficult situations.
Presentation 2: Akio Hosono, Professor, GRIPS“Coping with Crisis: Lessons from Latin America and Asia”
With his long academic and practical experiences in Latin American and Caribbean countries (LAC),
Prof. Hosono shared the Latin American and Asian experiences on financial crises, with specificreference to how these regions/countries coped with the crises and what are lessons and insights for2

African development. He briefly explained the macroeconomic situation before and after the crisesin Latin America and Asia: both regions undertook a series of macroeconomic reforms to overcome
the financial crises, which contributed to improving their fundamentals, thus reducing thevulnerability to adverse external shocks.
In the process of post-crisis reforms, competitive sectors and enterprises have emerged in bothregions, thanks to the government’s strong supportive policies to promote economic efficiency. Prof.
Hosono emphasized that supporting the real-economy sector and enterprises is also important to
reduce the vulnerability against external shocks. Regional integration was also crucial in reducing
the vulnerability as well as enhancing the competitiveness, especially in the East Asian context.
While LAC had also worked for strengthening regional integration, the result was rather mixed. Prof.
Hosono stressed that the de-facto regional integration in Asia—especially, FTA, regional cooperationsuch as Cheng Mai Initiative, and physical integration by regional or sub-regional
infrastructure—proved to be effective, and African countries can learn from the Asian experiences.
Regional integration in Asia is market-led, compared to that of LAC which has been driven by theformal process.
He concluded that the Yokohama Action Plan, one of the major outcomes of the TICAD IV process(whose implementation status will be monitored on an annual basis), is significant not only to attainsustainable economic growth but also to cope with crisis. He stressed the importance of highlightinga regional aspect in promoting infrastructure projects in Africa.

Open Discussions
Two faces of Africa
Regarding African future, many African participants commented that Africa has both (“happy” and“sad”) faces. While there is a tendency to highlight the latter aspect (“sad” face), Africa also has abright face, as witnessed by the successes of Mauritius and Botswana. In this context, it is important
to deepen the understanding of what have been the drivers of growth. On the other hand, an African
participant reminded that “big elephant” issues also reside within Africa itself and that Africa must
address the cases of Congo, Sudan, and Zimbabwe.
Coping with the financial crisis
Concerning Prof. Hosono’s presentation, a Japanese researcher added that political stability is also
crucial in managing and overcoming the financial crisis. An African participant commented that
economic development/management is closely linked to political management and asked how suchaspect could be addressed in the TICAD IV follow-up. Another African participant emphasized the3

importance of integrating African countries into the global production system such as value chains,
although current development debates do not fully address such business aspects.
Prof. Hosono agreed on the importance of political stability. Regarding global production system, hestated that it is necessary to change our way of thinking and that in this respect, the newly launched
WDR 2009: Reshaping Economic Geography (World Bank) provides an interesting framework. He
suggested the need to introduce new analytical tools.
There were comments on how to prioritize development challenges, especially what are immediate
solutions for coping with the current economic crisis, especially for African countries, and the role ofvarious stakeholders. Prof. Hosono responded that a “happy” face solution needs a couple ofmeasures, but that the recipe cannot be generalized. Even the short-term impacts differ among
countries (food importing countries, resource-rich countries, etc). Nevertheless, it is necessary toassist those countries that are seriously hit by the crisis.
On this point, Mr. Maxwell said that some observers thought the crisis would be long-lasting (evenas long as twenty years in some cases) and would derail growth prospects.

He urged the African

governments immediately to start scenario planning exercises so that they could better navigate
development processes under the uncertain global environment.
Growth and inequality
Some participants shared their concerns about the distributional effects of the current growth:according to an aid practitioner lived in Zambia, growth benefitted only a small part of the
population living in the capital city, and the poor people will be seriously hit by the current financial
crisis. He stressed that the donor community should take actions under such a circumstance. Anotherparticipant commented that the current GDP growth is pushed by the development of natural
resources, which could possibly be another field of exploitation and might aggravate the existing
disparities among the population.
To sum up the discussions, Mr. Maxwell shared his view that Africa has achieved important progress.
Growth is important to poverty reduction, and many institutions and professionals (the World Bank,
the Commission on Growth and Development, Prof. Paul Collier, etc.) have been working hard to
identify the drivers of growth. Especially Collier’s book offers a very good insight into this issue,
laying out four factors that impede growth. Although every country is different and acountry-specific approach is necessary, it seems that infrastructure is one of the important drivers ofgrowth, as the experiences of LAC and Asian countries suggest. On inequality, he stressed thatinvestment in social protection is important and that donors should also help to manage inequality inthe country.

4Part II: How to implement the TICAD IV promises for sustained growth in Africa?
Presentation 1: H. E. Elly E.E. Mtango, Ambassador Extraordinary and Plenipotentiary“African Growth, Financial Crisis, and Implications for TICAD IV Follow-up”
H. E. Elly E. E, Mtango, Ambassador to Tanzania, began by noting the current situation in Africa.
He said that in the period before the global financial crisis, Africa enjoyed 10 years of sustained
growth during which GDP grew by an average 5% per annum. However, the financial crisis arose
just as African economies were turning the corner. Ambassador Mtango went on to say that although
African banks, in general, are not suffering from the credit crisis (since they are less exposed to theglobal credit system), economic slowdown in Europe and America, the so-called secondary effect,
has had a significant impact on African countries. The overall growth forecast for the continent has
already been lowered from 6.5% to 5%. Tanzania also downgraded growth forecast to 7.5% downfrom 7.8%. He explained the effects on the economy and trade, foreign direct investment, capital andequity markets, the banking system, ODA, the tourism industry, remittances from the African
diaspora, foreign reserves, and the achievement of the Millennium Development Goals (MDGs).
In closing, Ambassador Mtango referred to the implications of the current financial crisis for TICAD
IV. TICAD IV is considered a great success because of its enhanced focus on economic growth. The
global financial crisis, however, puts in jeopardy the implementation of commitments of TICAD IV.
He urged donor countries to uphold their commitments to Africa.
Presentation 2: Izumi Ohno, Professor, GRIPS“Proposal for a New African Growth Support Initiative”
Prof. Izumi Ohno’s presentation began by focusing on TICAD IV and the current global
environment. She asserted that TICAD IV can be taken as a departure from previous conferences, inthat it demonstrates Japan’s serious engagement in Africa and its willingness to share East Asianexperiences. The current global financial crisis is testing Japan’s commitment to African
development. Prof. Ohno introduced some points from “the Proposal for a New African Growth
Support Initiative” published by GRIPS Development Forum in August 2008. The proposal is forJapan to immediately formulate overall and country-specific assistance visions for African
development. Regarding the incorporation of East Asian perspectives, she asserted that a standard“East Asian model” does not exist, and that dynamic capacity development—which has been longpracticed in Asia—is also important for Africa. She explained “four entry points” for Japan’s deeper
and long-term engagement in Africa (i.e., mobilizing aid to realize the existing vision, continuous
policy dialogue, building core infrastructure and aligning aid and other programs, mobilizing aid tofacilitate FDI projects) and gave some examples of the provision of Japanese ODA. She made four
requests for the Japanese government and the new JICA and emphasized the importance of a new
initiative for public-private partnerships, which is based on the TICAD IV commitment.

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Presentation 3: Matsuo Watanabe, Visiting Senior Advisor, JICA
“Industrialization in Africa and Donor’s Functions as Facilitator”
For Africa to realize the decades-long issue of economic diversification and sustained growth, Dr.
Watanabe argued industrial policy (IP) could be a viable means. He summarized the key principles
in pursuing IP: e.g. local context matters; and selection of target sectors needs clear criteria. To
address the traditional problems of IP (e.g. rent-seeking and corruption), entire process has to betransparent, and an institution of significant public-private partnership is of help. He stressedinternational community allow broader role of government (depending on institutional capacities ofindividual countries), diverse development strategies, and inevitable experimental failures in thetrial-and-error

process—which

contributes

toimprovingsocialinstitution

throughtheleaning-by-doing. He then introduced a hypothetical framework for considering the role of external
actors in IP process with particular reference to a JICA’s investment promotion project in Zambia.
He presented donor’s roles as a facilitator in Africa’s IP process: (1) information management; (2)consulting; and (3) serving as catalyst and back-ups. He criticized past donor practices which simply
told developing countries “what to do”, but did not necessarily work with to find “how to do”. Assuch he advocated “Consulting Aid” in the way business consulting services works for clients. Dr.
Watanabe concluded by noting that Zambia’s experience suggests a possibility that donor assistancecould fill some of the gaps faced by Africa (e.g. the gap intention and implementation; inter-regional
income/capacity gaps) and that donor assistance could help African countries to unleash their own
dynamic potentials.
Comments and JICA’s response: Kazunori Oshiyama, Director General, Africa Department,
JICA“Accelerating Economic Growth in Africa”
Mr. Oshiyama stated that as a practitioner, he is optimistic about African development and outlined
JICA’s four strategies for Accelerating Economic Growth for Africa. These are: (1) regional
infrastructure development (roads, ports, and electricity networks); (2) strengthening public-private
partnerships: (3) partnerships with international financial institutions; and (4) focusing on activities
for economic growth. He introduced some of JICA’s projects, for example, assistance for major
development corridors such as Nacara (northern Mozambique), the energy sector for infrastructureassistance, and the Toamasina Port in Madagascar (as an example of public-private partnerships). In
terms of promoting economic growth in Africa, he also spoke on the other JICA activities such as
One Stop Border Posts (OSBP), Michi-no-Eki (roadside stations), the Coalition for African Rice
Development (CARD), One Village One Product (OVOP), Enhanced Private Sector Assistance for
Africa (EPSA) which is based on the collaboration with the African Development Bank), and theTechno Park in Tunisia.

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Open Discussions
TICAD IV follow-up
Several African ambassadors commended the TICAD IV results and its uniqueness from theprevious conferences, stating that it encompasses the African perspective on the importance ofprivate sector engagement. In this regard, the Yokohama Action Plan is a crucial document, and its
follow-up is essential. While Japan should keep its promise of doubling ODA to Africa, it is vitally
important to increase Japanese private sector investment. This is a key element of the Yokohama
Action Plan. It is right that TICAD IV focused on infrastructure development (e.g., road network,
power) and cross-border border posts because these facilitate intra-regional trade. In this sense, it isimportant to ensure that a country-specific program can be extended to the regional level.
Regarding potential negative effects of the financial crisis on the TICAD IV promises as stated by
Ambassador Mtango, a Japanese participant reminded that the implementation of TICADIV will bemonitored every year. This should serve as opportunities not only to monitor, but also to improve theagenda so that both African governments and donors including Japan could cope with the changing
environment surrounding African countries.
An African ambassador shared his concern that in Africa, growth often leads to rural-urban gaps. It is
important to ensure that the rural people benefit from the fruits of growth. The rural people have no
investment stock, with 70% of them living below the poverty line. It is right that Japanese ODA puts
infrastructure in place; at the same time, FDI investment is very much needed. While the Japanesebusiness sector tends to consider Africa far away, this perception needs to be changed with thesupport of the academia.
Proposal for a New African Growth Support Initiative
There is broad support to the thrust of the proposal compiled by the GRIPS Development Forum,
which served as the secretariat for the multi-sector discussion group on Japan’s New African Growth
Support Initiative. One of the African ambassadors gave his concurrence with Prof. Ohno’s views
that each individual country needs a country-specific policy, but noted that it is difficult for Africancountries to benefit only from Japanese ODA. Japan should place greater emphasis on the role of theprivate sector. In relation to this, he showed interest in the growth experiences in Asia and the role ofJapanese private sector in the process. Speaking of Japan’s “entry points” in Africa, he stressed thatJapan should rather join up with other partners who have been supporting African development for
long.
Another ambassador concurred that the GRIPS proposal is very good. Since Ethiopia has along-term development vision (ADLI: Agricultural Development Led Industrialization) and7

industrial policy, Asian experiences are very relevant to the country. He welcomed Japanese support
to realize the vision and policy.
Prof. Ohno thanked African ambassadors for their general support to the GRIPS proposal. Regarding
the question on “entry points,” she agreed that Japan is a newcomer and a modest donor in terms ofaid volume, compared to the other donors. Therefore, Japan’s engagement in Africa must be put in apartnership context. In fact, this is one of the basic principles of the GRIPS proposal.
Policy coherence
One of the African ambassadors raised the issue of policy coherence between ODA and agricultural
policy: JICA provides new rice support (NERICA: New Rice for Africa), and consequently, the rice
will be exported as well as consumed locally. However, Japan takes a different stance at the WTO
negotiations, and its rice imports are strictly regulated. Under such circumstances, there is no market
for African countries.
On this point, Mr. Oshiyama responded that since Africa’s rice production is still low, it is premature
to link Japan’s new rice support to the WTO negotiations. Prof. Ohno admitted problems associatedwith policy consistency in Japan. For example, EPA negotiations always come to a standstill becauseof the agricultural issues. Strong leadership and inter-ministerial coordination are essential to
improve policy coherence in Japan. Japan scores poorly in the Commitment to Development Index(CDI) devised by the Center for Global Development (a US think tank). This is primarily due to its
immigration and agricultural policies, rather than ODA itself.
Learning from UK experiences
A participant acknowledged that the UK has a long experience of supporting Africa, and theJapanese development community would have to learn from this. He questioned how the UK thinks
of JICA’s assistance compared to its development assistance experiences.
Mr. Maxwell responded that he was impressed by today’s presentations by Japanese experts andpractitioners, all of which are very professional and concrete. Nevertheless, he felt that there exists a“missing element” throughout today’s discussions—i.e., policy environment. Such perspective
should serve as a link between the global financial crisis, the GRIPS proposal, and Japanese ODA.
Prof. Ohno commented that there is ample scope for fruitful collaboration between the UK and Japan.
The UK has rich experiences in terms of providing development assistance to Africa, compared toJapan, which has more extensively worked in Asia. Their assistance approaches are also different:
the UK excels in policy dialogue while Japan is good at field-based, process-oriented work. Becauseof such diversity, the two countries can complement each other and work together to support African8

development.
Coordination with China and South Korea
An African researcher asked Mr. Oshiyama his views on policy coordination between Japan and
China in African development. Mr. Oshiyama replied that currently there exists no coordination
between the two countries, but that the time has come to start discussing this matter. In light ofChina’s important role in African development, Japan should positively collaborate with the country.
In connection with the TICAD IV follow-up, an African ambassador proposed a possibility of setting
up a coordination mechanism among China, South Korea, and Japan. Such donor coordination andengagement—not rivalry—are crucial and beneficial for Africa.
State capacity building and Asian experiences
Another African ambassador stressed the importance of paying attention to the role of the state andsuggested the need for capacity building for a developmental state. Regarding industrial
development, education and skills are important; but in Africa, they do not translate into industrial
development, especially in rural areas. Highly-educated people are unable to find proper jobs. Rural
areas in Asian countries are much better than those in African countries (for example, small-and
medium-enterprises, supporting services), and he was particularly attracted by “Michi-no-Eki”. He
stressed the importance of learning rural development from Asian experiences.
Prof. Hosono explained that the Japanese approach to capacity building is process-oriented andbased on joint work. In various cooperation activities, the Japanese and their counterparts haveworked together and learned through practices.

Concluding remarks
Mr. Hiroshi Kato, Deputy Director of the JICA Research Institute, thanked ambassadors and theother participants for their giving valuable comments throughout the seminar. He reflected thediscussions as follows.
With reference to a statement by an African ambassador about the importance of paying greaterattention to the people, Mr. Kato stressed that this precisely corresponds to the concept of “Human
Security” which Mrs. Sadako Ogata, JICA President, emphasizes. Regarding the role of ODA, heconcurred with the participants that while ODA can play an important role, it is only a limited part ofthe development process. Thus, the relation between Africa and Japan should be amplified, going
beyond ODA. Nevertheless, as many ambassadors stressed, it is important to monitor how Japan9

keeps the promise of TICAD IV. He also thanked an ambassador who highlighted the importance ofstate building and industrial development.
Mr. Kato also thanked the GRIPS team, including Prof. Ohno for sharing her insights for ideas on
new possibilities Japan can export in extending support to African development, and Prof. Hosono
for his valuable contributions to highlighting the importance of regional economic integration andindustrial competitiveness, with infrastructure development as a key entry point.
Lastly, he concluded that while this seminar started with the discussions on the current global
financial crisis and all the partners are urged to act quickly, it is also important not to lose sight of
medium-and long-term economic development in Africa.

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