Joint ECA/AERC “Conference on Poverty, Inequality and Labour Markets”
“Using Knowledge and Peer Learning to Improve Policies to Reduce Poverty in Africa”

Opening Remarks

by Abdoulie Janneh
UN Under-Secretary-General and Executive Secretary

11 October 2006
United Nations Conference Centre
Addis Ababa, Ethiopia

Mr. Lyakurwa, Executive Director, AERC,
Distinguished Guests,
Ladies and Gentlemen:

Good morning.

I would like to welcome you all to this joint AERC/ECA Conference on “Poverty, Inequality, and Labour Markets” organized to disseminate the results of an AERC research program on that theme. ECA thanks AERC for inviting us to partner with them. For us, this partnership is consistent with our goal of advancing the frontiers of knowledge on issues that are of critical importance to our region and making that knowledge readily available to policy makers for improved decision-making. ECA is committed to partnering with African research institutions to accompany our countries in their search for durable answers to the challenges of development that they face.

Three days ago, I had the pleasure of welcoming a group of distinguished African experts and policy-makers to the AERC/ECA Workshop on Asian Drivers. Although that Workshop focused on the impact of Asia's two new emerging global economic giants, China and India – on Africa, its objective was to explore how best to leverage the growing economic engagement of those two countries to improve the human condition of our people. This is an objective that I believe is shared by this Conference.

This Conference is important for reasons that we all know – poverty remains a major development challenge in our region, a problem that bars our access to the club of developed countries. But the Conference is important for another reason: because it is a dissemination conference, it underscores our faith, our confidence that knowledge about the determinants of poverty can help us abolish it. Gareth Stedman Jones, in his 2004 book, “An End to Poverty?” which traces the history of ideas on poverty eradication not only reminds us that there once was a time when it was believed that the intellectual progress of humankind would be accompanied by a material transformation of the human condition but also shows that those ideas did indeed contribute to the near abolition of poverty in western Europe.

More often that not, into stories on Africa and African countries is woven the word “impoverished”. Evidence to support this characterization abounds: Worsening social indicators; Conflicts; Bottom ranking in all leagues of human development. But things are changing. Strong growth has resumed and many of our countries have grown at more than 5% per annum consistently over 6 years now. This impressive performance as reported in ECA's 2006 Economic Report on Africa is not only due to strong commodity prices, but also due to much more prudent and knowledge-driven macroeconomic policies. And people are beginning to take notice. About two weeks ago, I read one of those investment advice columns in the Financial Times and I was pleasantly surprised to read the column advising that UK pension and hedge funds should consider investing in Nigerian Banks because the country is poised for higher growth and returns would be high!

Distinguished guests, notwithstanding these developments and initiatives, it is clear that despite impressive country-level performances and overall improvements in macro-economic performance, poverty remains high. It is difficult for me as a development practitioner to understand why this is so since Demery and his co-authors some time ago showed that growth was associated with poverty reduction in Sub-Saharan Africa. Anyway, what the current evidence does suggest is that at current rates of growth, our region is performing rather poorly with respect to meeting the targets of the Millennium Development Goals. The overall progress towards the achievement of the MDGs has not been very promising particularly in Sub-Saharan Africa. Inequalities in access to social services and jobs as well as the poor employment growth remain a problem. The growth process remains too narrow and is generally said to be without jobs.

Without doubt the studies whose main findings you have come here to disseminate will confirm the current evidence and also propose some policy options.

But I also hope that your conference will also address the much more critical question: What should Africa do to secure the positive gains of the recent past. A very commonplace answer to this is:

“More emphasis needs to be placed on improving the productive base of African countries and in parallel expanding market access. In this respect, both African leaders and development partners have a shared responsibility. African leaders must continue to be supportive of the private sector through the pursuit of prudent policies that nurture domestic price stability, minimize the cost of doing business, promote export competitiveness and facilitate market access.”

But there is perhaps another answer, not opposed to the ones above, but perhaps the unseen super-structure on which the above are built. It is knowledge. Knowledge production (which you do); knowledge sharing (which is what this conference is about) and; knowledge use (which is what you hope to get out of this conference).

The importance of knowledge – in the three dimensions mentioned above – for economic growth is pretty well known. Francis Bacon long ago said “knowledge itself is power”. The 1998 World Bank Development Report “Knowledge and Information for Development” made the point that successful development entails not just the closure of the physical or indeed human capital gaps but also closing the knowledge gap – a point also made in ECA's publication “Harnessing Technologies for Development” . The economic journalist David Warsh notes in his new book “Knowledge and the Wealth of Nations” , that “new ideas, more than savings or investment or even education, are the keys to prosperity, both to private fortunes, large and small, and to the wealth of nations – to economic growth.” Your profession was fixated on knowledge in the 1990s as you engaged with the “New Growth Theory” following the publication of Paul Romer's very influential paper – “Endogenous Technological Change” in 1990– a paper you refer to as “Romer 90”. This paper for the first time explicitly incorporated knowledge in your very fanciful and abstract growth models.

One key lesson that we at ECA have learned from our work in the nearly 50 years of our existence is that knowledge about pathways to improve economic management holds the key to development. We need to generate new knowledge as well as know how to use them. Knowledge use is critical for our region's progress towards the targets of the MDGs. It is therefore for that reason that knowledge is acutely emphasized in our current efforts to reposition this institution. Our current efforts are strongly geared towards conveying to our member states the view that improvements in the use of economic knowledge is critical for securing the progress recorded recently across the swathe of our continent and for moving forward.

We are redoubling our analytical work on poverty analysis and the Millennium Development Goals (MDGs). For this reason, we have created a new Section, MDGs/Poverty Analysis and Monitoring Section, to underscore the centrality of and the seriousness that we attach to Africa making progress in these areas. A key and very important component of our work in this area is peer learning (on poverty reduction strategies and the Millennium Development Goals) and knowledge management. Permit me to illustrate what we have done and are doing in this area with our flagship peer learning initiative, the African Learning Group on Poverty Reduction Strategy Papers (PRSP-LG). Some of you may have heard of this initiative and participated in one of its meetings.

Shortly after the introduction of the PRSP in 1999 by the World Bank and the International Monetary Fund as a prerequisite for access to debt relief, ECA hosted a workshop for African countries for dialogue on the PRSP content and process and on its implications for the region. In July 2000, ECA launched a high-level mission to several African countries at different stages of the PRSP process to learn first-hand how they were adjusting to the PRSP process and addressing the practical challenges that the process was raising.

One key message that came out of the workshop and the consultations with member States was that the Structural Adjustment Policies of the 1980s would have been better managed had there been a mechanism for the systematic sharing of experience and peer learning among countries, which could also have provided a platform for the articulation of a strong African voice in the international community on the continent's experience with the challenges of adjustment and poverty reduction.

Given the context and in recognition of the operational challenges associated with the PRSP approach, the member States urged ECA to establish an African-owned forum that would facilitate African peer learning and serve as a mechanism through which Africans could ensure the relevance of the PRSP approach to Africa's development challenges.

In response to the request from member States, ECA established the A frican Learning Group on Poverty Reduction Strategy Papers ( PRSP-LG) 2001. The LG has facilitated information sharing among diverse stakeholder groups in African countries (including civil society) on their experience with the PRSPs, and helped identify best practices and outstanding implementation challenges, while in addition promoting peer learning and African ownership of poverty reduction strategies.

Information distilled from meetings of the LG has enabled ECA to provide targeted advisory and policy support to member states, broker support from other development institutions and partners, and network expertise to assist countries. The LG was able to convey to Africa's development partners the region's concerns about the PRSP and thus contribute to influencing their policies towards the continent by organizing its meetings back-to-back with the Plenary meeting of the Strategic Partnership with Africa (SPA), a grouping of major donors to Africa.

The crucial role that the LG has played was recognized by the African (Ministerial) Plenary on the PRS and MDGs in Cairo in March. The Plenary urged ECA to revive the Learning Group (whose activities had been suspended while awaiting the results of a knowledge audit) and to broaden its mandate to include learning on the Millennium Development Goals. My colleagues will tell you more about the LG and what we have been doing to promote peer learning on poverty reduction strategies and MDGs since Cairo.

So, Ladies and Gentlemen, broadly, the LG does what your Conference seeks to do – disseminate knowledge on best practices on poverty reduction strategies and the MDGs. In many cases, there is a deep aversion for imagining the new, a reluctance to believe that new things can happen. A new idea – and there are many in the area of economics and economic policy - triumphs not because those opposed to it are brought around (or undergo a Damascene conversion) but because it is embraced by a new generation. Through our Peer Learning and Knowledge Sharing initiatives, we hope to encourage new generations of African policymakers to embrace new ideas and thus steer our member states to the new, to innovate. Through this process we aim to help our member states build appropriate knowledge assets to secure and carry forward their impressive performances of the rest past.

In their book, “Plowing the Sea: Nurturing the Hidden Sources of Growth in the Developing World” , Fairbanks and Lindsay advised that “leaders need to think about developing more sophisticated knowledge assets.” It is my view that our leaders are already doing that as evidenced by the set of policies and management techniques that they have introduced over the recent past, policies and management techniques that in part explain the recent improvements in economic performance. Your Conference will be a resounding success if it contributes in important ways to assisting countries in our region to develop the sophisticated knowledge assets needed to combat poverty, reduce inequality and improve labour market outcomes for our people.

While looking forward to reading the outcome of your Conference, I thank you for listening and wish you fruitful deliberations.