USAU: AFRICA ECONOMIC CONFERENCE REITERATES

UNCLAS SECTION 01 OF 02 ADDIS ABABA 002963

SIPDIS

STATE FOR AF/RSA, AF/EPS

E.O. 12958: N/A
TAGS: ECON EFIN ETRD PREL AU
SUBJECT: USAU: AFRICA ECONOMIC CONFERENCE REITERATES
SUPPORT FOR AFRICAN UNITY, SELF-RELIANCE


1. (U) SUMMARY: The UN Economic Commission for Africa (UNECA)
and the African Development Bank (AfDB) hosted the Africa
Economic Conference (AEC) in November at UNECA headquarters
in Addis Ababa. Conference participants, including African
leadership, expressed unanimous support for pan-African
institutions, which they view as key to the maturation of
Africa,s political climate, as well as the growing ability
of Africans to speak with a single voice. African unity,
economic integration, and self-reliance as paths to
prosperity emerged as major conference themes. END SUMMARY.


2. (U) The opening of the AEC underscored the need for Africa
to position itself in its relationship with the developed
world to achieve maximum benefit and avoid collateral damage.
In his remarks, UNECA Executive Secretary Abdoulie Janneh
reflected on the year, noting the effect of the financial
crisis, and stressing the need for African ownership of the
continent,s development, including by avoiding excessive
dependence on Official Development Assistance. While
recognizing that Africa has suffered secondary effects from
the crisis, such as reduced export earnings, he highlighted
the accompanying opportunity to focus on Africa,s agenda for
its own development. Referencing differences in the economic
measures appropriate for developed and developing economies,
he suggested the need for active public engagement to develop
industrial capacity in African economies, enabling them to
expand beyond extractive sectors and increase employment
along with growth. Janneh also focused on the issue of
climate change, and the need for developed countries,
responsible for the crisis, to support Africa through
"equitable and predictable financing mechanisms."


3. (U) AfDB President Donald Kaberuka reiterated many of the
same messages, stressing the need for African regional
solutions to economic development in the current climate
which, he theorized, might lead donor countries to focus on
domestic concerns. He stressed the role of the AfDB in
mitigating the effects of the crisis on Africa, responding to
the urging of the G20 to scale up operations, increasing
lending, and innovating in new areas such as trade finance.
He noted the importance of diversified economies for
surviving such economic crises, and urged African countries
to expand beyond commodity dependence. Kaberuka also called
upon the world to look at Africa as a part of the solution to
the economic crisis, with the potential to stimulate global
consumer demand. India and Africa, he noted, share the same
approximate population (1 billion) with nearly the same level
of reserves ($280 million). The difference, he said, is that
India is a federation, while Africa is a "balkanized" group
of 53 member states with growing, but limited, economic
integration. He noted that while Africa calls for a strong
voice in the international arena on issues such as climate
change, this voice should be based on a strong internal
agenda.


4. (U) African Union Commission Chairperson Jean Ping focused
his remarks on the expanding role for Africa in the G20,
including attendance of Prime Minister of Ethiopia Meles
Zenawi, as well as Janneh, Kaberuka, and himself. While
acknowledging that the world now realizes that Africa cannot
be ignored, he noted that Africa needs to rely on its own
resources and capacities. Reflecting on the levels of
financing provided to bank bailouts in the U.S., he said that
the real question is not the availability of resources to
eradicate poverty, but the political will to do so. His
comments also addressed the need for Africa to expand
partnership with different countries and regional groupings,
with a clear focus on Africa,s expanding partnership with
China.


5. (U) Prime Minister Meles delivered the conference's
keynote address, focusing on the question of whether it is
possible to foster development in an age of economic crisis.
He concluded that such growth during the current phase is
improbable, but not impossible, and that African
policy-makers' role is to advance measures "to make the
possible probable." His speech focused substantial attention
on the origins of the crisis, especially the role of poor
financial governance in the West, unsustainable consumption
levels among U.S. consumers, and limited oil supplies.
(NOTE: With regard to oil, he also noted the associated
environmental problems, and the issue of climate change,
which, he stressed, could lead to "environmental catastrophe,
not growth." END NOTE.) He highlighted the food crisis in
2008, pressure on development aid, shrinking remittances, and
reduced foreign direct investment, noting that the
circumstances that allowed for progress in reducing poverty

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in recent years have changed.


6. (U) Meles further focused on possible opportunities that
the current crisis presents. In the event of a robust global
response to climate change, he said that Africa could have an
important niche in the global market, fueling growth, given
the continent's vast renewable energy resources. This would
also require substantial resources for Africa to promote
adaptation. In addition, he focused on the possibility of
China -- and perhaps Japan, the Gulf states, and India --
investing surplus savings in Africa. Meles discussed the
possibility of African states taking a range of steps to
capitalize on the potential opportunities presented by the
global economy, including by throwing off the
"straight-jacket of neoliberalism."


7. (U) COMMENT: The AEC represented a strong showing of
policy-makers and academics concerned with issues of economic
growth in Africa, with near unanimous delivery of a message
in support of African unity, self-reliance, and empowerment
on economic issues. Policy-makers showed strong interest in
developing the appropriate incentives to advance industrial
development and sustainable, job-creating, economic growth in
Africa. While substantial attention has been paid to
relationships with the European Union and China surrounding
trade and investment relations, there was limited discussion
of USG engagement through avenues such as the Africa Growth
and Opportunity Act (AGOA) forum. It may be worthwhile for
the USG to explore greater leadership on technical and policy
issues in the context of the next AEC. END COMMENT.
MUSHINGI