Statement by K. Y. Amoako
United Nations Under-Secretary-General and Executive Secretary,
ECA

30 November 1997

Nazreth, Ethiopia

Your Excellency, Ato Girma Birru,

Minister for Economic Development,

Dr. Berhanu Nega,

President of the Ethiopian Economic Association,

Ladies and Gentlemen,

It gives me great pleasure to be here with you on the occasion of the Seventh Annual Conference on the Ethiopian Economy. When Dr. Nega invited me to join you today, he asked me to deliver the Conference Keynote Address on Human Resources Development. This is indeed a subject matter very close to my heart. Among my previous experience before joining ECA, I served as the Chief of the World Bank's Country Operations Program for a number of East African countries, including Ethiopia, and later as Director of the Bank's Education and Social Policy Department with responsibility for policy formulation and development of strategies in education, labor markets, gender and poverty reduction.

Traditionally, a keynote address is often delivered at the start of the Conference and is designed to help set the tone of the Conference's deliberation. Regrettably, in this case, I could not be here with you when the Conference started on Friday. I understand that you have already had two days of very productive discussions on this topic, especially as it relates to Ethiopia. I would not want to repeat what you have already covered. I only wish that I had had the opportunity to personally share in some of these discussions.

However, given my current responsibilities at the Economic Commission for Africa (ECA), what I would like to do today is to draw to your attention to the broader African perspective on the subject matter of human resources development, and the impact it has on poverty reduction, capacity building, and economic growth. I also want to share with you how we at the ECA have positioned the Commission to assist member states in this area.

Mr. Chairman,

Ladies and Gentlemen,

For Africa, more than any other region in the world, human resources development is the one item that stands out pre-eminently in its development agenda. Throughout the world, inadequacies in human resources often are manifestations of poverty. However, in the case of Africa, these inadequacies are also in turn contributing to the perpetuation of the glaring poverty.

Human resources development policy is recognized as one of three pillars of an effective strategy to reduce poverty. The other two are the promotion of broad-based economic growth and the provision of targeted safety nets for those who can not readily benefit from the opportunities associated with broad-based economic growth.

Given the low incomes and extensive poverty in most countries in sub-Saharan Africa, there is general agreement that the thrust of our efforts to address the poverty problem in the continent must come from:

supporting broad-based growth which is labor-absorbing and is therefore relying on the resource that the poor have in abundance- their labor, and

improving human capital through investments in the social sectors that favor the poor through expanded provision of primary social services.

The usual emphasis of human resources investments is on education, health, and other health-related inputs. There are important interactions among these investments, with education in particular widely thought to improve the results of investments in other aspects of human resources. The empirical evidence is overwhelming in this regard.

Investing in people's education, health, nutrition, and family planning creates knowledge, broadens skills, and improves health-- the human capital so essential for sustaining economic growth, raising living standards, and enriching people's lives. And because the poor have few assets, investing in their human capital often is the best way to equip them to become more productive. Beyond the gains of individuals, such investments also benefit society. Widespread literacy, for example, strengthens the institutions of civil society and of governance.

Mr. Chairman,

Ladies and Gentlemen,

Investment in education, particularly primary education, boosts economic growrh. A recent Bank study, "The East Asian Miracle: Economic Growth and Public Policy" shows that the single most important factor in launching the miracle countries on a path of rapid , sustained economic growth was universal or near universal primary school enrollment. In 1960, Pakistan and Korea had similar levels of income, but by 1985 Korea's GDP per capita was nearly three times Pakistan's. This outcome is explained largely by the difference in intitial primary school enrollment rates between the two countries. In 1960, fewer than a third of the children of primary school age were enrolled in Pakistan while nearly all were enrolled in Korea.

The benefits of education show up clearly for individuals. Education expands the capacity of people to make better use of technology and inputs, exploit new information, and adapt more effectively to change. Research has shown that for men in Cote d'Ivoire an extra year of schooling enhanced earnings by 12 percent; in Ghana and Malaysia an extra year of schooling boosted farmers output by 2 to 5 percent, after controlling for other factors (e.g farm size, inputs and hours worked).

Education and other social investments reinforce each other. Improvements in human resources development through basic services in education, health, and nutrition directly address the worst consequences of being poor. Schooling directly improves labor productivity and indirectly improves household welfare. Early childhood programs, enhance the effectiveness of primary and secondary education, which brings about improved health and increased incomes. These gains then boost productivity, and ultimately, lower the cost of providing basic social services. Better health and nutrition also directly reduce infant mortality and indirectly impact on fertility.

Mr. Chairman,

Ladies and Gentlemen,

Education has a powerful impact on women's productivity. In agriculture the returns to an additional year of women's education can range as high as 15 percent where modern technology has been introduced -- about the same as the returns to men. Educated women also are more productive in their role as caregivers in the home. Girls with more education grow up to be women who have fewer and healthier babies, make more informed choices about caring for their families and become more skilled workers.

It has been shown in India that an extra year of primary schooling for a thousand women cost $32,000 but yield a social benefit of $52,000 (after allowing the lag between when girls are educated and when they grow up and become mothers). Similarly in Kenya and Pakistan the social benefits of educating girls are big enough to cover the cost of the investment, even before including the benefits of maternal education for adult health and market activities. Getting more girls into school is the most effective investment to transform the viscous cycle of economic decline and poverty into a virtuous cycle of growth and opportunity.

Good health and nutrition produce benefits now and in the next generation as well-- through their effects on children's physical and intellectual develoment, which affects their subsequent productivity as adults. In China and Thailand, it has been shown that children lagging behind in height-for-age, a sign of chronic malnutrition, typically fall behind the grade normally attained by children of the same age. Also healthier children attend school more regularly and are more able to keep up with schoolwork. In Jamaica children infected with whipworm scored 15 percent lower before treatment than their uninfected classmates. After treatment they did just as well as the uninfected children.

The health of adults is important not just for themselves but also for their children. An adult's death or sickness may precipitate a child's withdrawal from school. The loss of household income due to the sickness of the adult breadwinner could make it more difficult for the family to afford schooling costs and possibly force the child to take over household responsibility previously performed by the sick or dead adult. This situation typifies many of the households stricken by the aids virus in Africa.

Your Excellency,

Mr. Chairman,

Ladies and Gentlemen,

The record of human resources development in Africa lags far behind the levels required to support vigorous and sustained economic growth and substantially reduce poverty. We have begun to witness significant gains in the economic performance of Africa countries since 1994. Yet, millions of Africans still lack minimally acceptable levels of basic social services. The challenge for Africa is particularly great given that this is the continent where poverty is likely to increase during the remainder of this decade unless many countries in the region make significant changes in their policies.

By way of background, let us examine briefly Africa's record over the past three decades of human resources development and how this record compares to that of other regions.

While developing countries as a whole enjoyed tremendous progress in social indicators over this period, progress was the slowest in Africa. Regrettably, we also have evidence of reversal in this progress in some cases.

In the education sector for instance, developing countries as a group have enjoyed impressive gains in school enrollments at the primary level. For sub-Saharan Africa, average gross primary enrollment rate increased from 50 percent in 1965 to 70 percent in 1992. But these averages conceal the fact that eleven African countries experienced a decline or stagnation in gross enrollment rates during the 1980s.

In health, African countries enjoyed remarkable improvements in immunization coverage in the 1980s, but immunization rates in some sub-Saharan countries started to turn down in the 1990s. Immunization of children against life threatening diseases, such as diphtheria and measles seemed to be sliding back in the mid-1990s after a peak achievement in 1990 when coverage had reached 54 percent.

At population growth rate of nearly 3 percent per annum, sub-Saharan Africa has the fastest growing population in the world. If this trend continues unabated, population growth will offset any reduction in the number of poor in most of these countries. The associated high fertility in sub-Saharan Africa has also resulted in large household sizes and high dependency ratios which are increasingly associated with poverty.

Closely linked to the population question is the persistent inequality in access to basic education and health services. Indeed, the dismal state of female education and illiteracy continues to undermine the potential economic contributions and empowerment of women -- a major suppressed force in Africa.

If we look at the record of life expectancy, which perhaps is the single best indicator of welfare, we see that over the last three decades the gain in average life expectancy in sub-Saharan Africa has been only 10 years - from 40 years in 1960 to 50 years in 1994. According to the latest Human Development Report by UNDP, this absolute gain is the lowest in the developing world. Furthermore the current life expectancy of 50 years for the average person living in sub-Saharan Africa is in itself lower than that of any other region in the world.

It is against this background of poor social indicators that we define the human resources development challenge in Africa today which when not addressed will adversely affect our lives tomorrow.--

an Africa requiring a highly productive skilled work force and trained personnel to manage its fragile economy, cope with new technologies, and catch up with a rapidly changing global economy;

an Africa where public resources in the social sectors have not been used effectively in the past and where quality and outcome of human capital investments have, by in large, been poor; and

where persistent fiscal constraints coupled with unabated increases in population have strained the sheer capacity of governments to provide even the minimum social service requirements.

Mr. Chairman,

Ladies and Gentlemen,

The most daunting reality hits home when we are presented with the projection that nearly one-third of the people living in our region today will not survive to age 40, unless countries undertake major policy shifts to reverse current trends. In East Asia, the corresponding figures is less than one-tenth. This to me sums up the human resources development challenge for Africa. For Ethiopia, which today ranks close to the lowest on the UNDP's human development index, the challenge is even more formidable

How then is the way forward? Most countries in sub-Saharan Africa will continue to face financial and institutional constraints What are the priorities for human resources development actions?

As in the past, governments will continue to play a major role in bringing about sustained development in this area. But results do not depend only on additional resources. They also depend on how well they are used, how successfully inter-sectoral links are exploited, and how successfully the government catalyses, rather than undermines private effort. Evidence from research suggests four priorities for action: Invest in Basic Education; Invest in Girls' Education; Invest in cost-effective health services; and Invest in early Childhood Development.

In the poorer countries basic services typically means focusing on primary education and primary health care. Where primary enrollments and health access are almost universal, the emphasis would shift toward secondary services. At each level the aim is to expand access and improve outcomes.

Attention needs to be given to correcting the persistent bias against primary education and basic health in allocation of public resources.

Recent studies show that government expenditures on education and health care can be allocated far more cot-effectively, with the prospect of extending basic services to a larger number of low-income Africans.. For instance, major improvements in health care can be achieved by redirecting expenditures from high-cost curative medicine in modern hospitals to preventive and community-based systems. Both on equity and welfare efficiency grounds, big public hospitals in urban areas should no longer be allowed to swallow up a large portion of public health budgets.

In addition to the focus on basic services, it is also crucial that prudent attention be given to secondary and tertiary education in the context of the pressing capacity building needs in Africa. Rapidly changing technology and continuous shifts in economic structures place a premium on knowledge expansion and availability of manpower with proficiency to learn new skills.

Clearly, the need for increased investments in human resources developments is important. However, a mere focus on expanding public provision of social services will not get us far. Attention to sound macroeconomic and social sector policies to tackle quality and efficiency issues is crucial.

The legacy of inefficiencies, waste, and poor quality that in the past characterized public provision of education and health services in many of our countries offers us vast untapped opportunities for efficiency gains in allocating and utilising public funds at current levels. The first order of business in Africa should be to go after these gains aggressively.

As Gary Beacker, a Nobel Laureate put it recently, "If you invest only in human capital, you are not going to be able to succeed if you have a bad macroeconomic system. If you have a good macroeconomic system and you neglect human capital, you are also not going to do so well. But if you do both, it is going to be more productive than either component alone".

Mr. Chairman,

Ladies and Gentlemen,

Success in achieving human resources development will depend on a partnership between government, families, communities and the private sector in promoting girls' education, good nutrition, early childhood development, and in financing basic education and health services. This partnership can also help in removing the gender and urban bias in the provision of social services that exist in many African countries.

Mr. Chairman,

Ladies and Gentlemen,

To advance these and other related measures, a sustained focus on sector-wide reforms is a prerequisite. The United Nations family, including the Bretton Woods Institutions, through the System-wide Special initiative on Africa (UNSIA), are making a concerted effort to support African governments with sector-wide reforms in education and health. The World Bank, UNESCO, and WHO are taking the lead in coordinating this effort under the framework of the Special Initiative.

By way of background, the Initiative, launched in March 1996, represents the single largest single effort at coordinating UN's developmental activities in Africa. UNSIA includes thirteen program clusters, of which the largest two are education and health. The focus of these two clusters is on human resources development and poverty reduction through provision of basic education and health services in the broader context of sector-wide reforms. Its most prominent goal is basic education for all African children by the year 2005. Together with UNDP, ECA shares the overall coordinating function of the Special Initiative.

Sector investment programs, in the form of clearly defined sectoral strategies, goals, monitorable targets, policy actions, and funding commitment and instruments, have been identified as the preferred operational modality of the Initiative. The idea is to coordinate the programs of various UN agencies active in the sectors so as to tap synergies and avoid duplication.

In an increasing number of African countries, sector investment programs in education and health are now being considered under the framework of the Special Initiative. Countries where such programs are under implementation or preparation include, Guinea, Ghana, Ethiopia, Mauritius, Malawi, Mozambique, and Senegal (in education): and Ghana, Mali, Mauritius, Mozambique, Niger, Senegal, and Zambia (in health).

Let me now turn briefly to what we at ECA are doing in this area. First, we will use our leadership role in the Special Initiative to ensure that the efforts of the UN system have maximum impact in the provision of social services-- education and health. The second thrust of our assistance strategy to Member states is on capacity building. The Commission strongly believes that weaknesses in the professional skills and institutional capacity in Africa are at the heart of the development challenge in Africa. To this end, we have integrated capacity building, and training in particular, and empowerment of women as a cross-cutting themes in the work program of all our substantive divisions.

I would like to draw your attention to one of our activities at ECA in support of capacity building in Africa -- Networking with partner institutions and experts in the region and abroad to Provide Economic and Social Policy Advice and Build policy analysis Capacity within Member States. The objective is to provide the services of senior-level experts on economic policy issues to Member states by networking with major sources of talent, primarily in Africa.

Preparatory work is underway to identify potential network partners, negotiate relationships, and work out an arrangement to undertake joint research and advisory services in human development-related tasks. The tasks, which will have to be agreed with the partners, are likely to include: promoting distance learning; promoting policy dialogue with Member States on equity and growth Implications of macroeconomic policies; making public policy pro-poor in Africa; building capacity for poverty analysis and monitoring; understanding and reducing the flight of human capital from Africa, and promoting womens rights and full participation in development. ECA plans to be an active member of existing networks but will also sponsor new networks. In this context, I am delighted that I have had the opportunity today to meet colleagues in the Ethiopian Economic Association who are potentially members of the planned networs. This is a first step towards a fruitful partnership to advance economic and social policy education and research in Ethiopia and Africa.

Thank you for your attention.