20 long-term development objectives. Even the proposed debt relief strategies under consideration would leave some countries with an unsustainable debt burden. Instead, the focus should be on reducing the stock of debt to sustainable levels for countries that are undertaking comprehensive and sustained policy reform programs, even if that means differences in treatment across countries.

# Unresolved Issues

The progress made so far has been uneven and ni-xed but the future agenda is even more difficult due to the existence of several unresolved issues. There are a number of concerns that characterize the future course of adjustment programs, a number of trade-offs and difficult choices that need to be made by the governments, several tensions that need to be defused and, therefore, a whole host of challenges Z.hat have to be faced. There are, at least, four tough challenges that involve these trade-oils and choices.

The first and foremost challenge is whether the respective roles of the state and private sector are to be clearly defined and demarcated or left ambiguous as before. There is a need in depth how much adjustment has taken place and how successful it has been in African countries. This study-Africa Adjustment Study (AAS)-compares the policies and performance of 29 SubSaharan African countries during two periods: from 1981 to 1986, when most African countries were in economic crisis, and from 1987 to 1991, when these countries adopted structural adjustment programs. This study was supplemented by case studies of seven countrieslBurundi, Cote d¶voire, Ghana, Kenya, Nigeria, Senegal,rnments to guide resource allocation with administrative measures rather than leave it to market mechanisms is still much stronger and politically attractive, despite the evidence that the results of direct government allocations have been dismal in most African countries. As Jeffrey Herbst" argues, overvalued exchange rates, excessive state intervention and inefficient parastatal companies were not irrational "distortions' for those who intent on staying in power, only for the development of the population as a whole. Direct state intervention is used for resources to flow to constituencies important to the politicians' continued tenure in office. There is not much evidence, as yet, that this propensity has been checked or is on decline.

The recent debate about the causes of the success of the East Asian countries has renewed the call by a group of intellectuals and NGOs for greater govermnent interventions in directing credit, subsidies, foreign exchange in promoting industrial development The misery and failure this strategy has caused during the last twenty-five years does not seem to have sunk in. This tension between the direct role of the state and the indirect and supportive role in the allocation resources remains a thorny issue.

The second challenge, related to the first, is to develop better adnministrative and institutional capacity in order to deliver essential social services, maintain and operate infrastructure facilities, protect environment and alleviate poverty. A greater participation by the IlHarbst, **1.,** i990, **"Structunl** Reform and Dcbt in **Africa", in R.** O'Brien and L [verson (cds.), **Finance** and the Intemalional Economy: 3, Oxford University Press, Oxford.