Talking Notes for President Benjamin William Mkapa on the Topic "How can Globalisation Deliver the Goods: The View from the South" at the World Economic Forum, Davos, 25 January 2001

1.0 Introduction
I am not sure I can speak for the "South", and I do not have that mandate. But speaking as President of Tanzania, I believe that globalisation can deliver, just as Tanzania can theoretically play and win in the World Cup!

In football, as it is in globalisation, Tanzania, a least developed country, can play and win, but only if there is sufficient, sustained and genuine will among the developed industrialised nations, and the multilateral corporations in those countries, to enable us build the conducive environment and the capacity to do so.

The bottom line is political will, economic realism and good faith. Does there exist among rich trading and industrialised nations such political will and good faith? Do we have in the boardrooms of trans-national corporations that are at the cutting edge of globalisation the genuine desire to help Africa be a player of promise? Is there evidence of such political will and good faith? What does the record of the implementation of Uruguay Round Agreements and the introduction of new issues, as well as trends in ODA, in capital flows and in terms of trade herald?

These questions must be asked for they embody critical factors if Africa is to adequately address its supply side constraints to effectively participate in and benefit from global trade.

2.0 Review of the Evidence
For many in the South, globalisation denotes increased trade, broad based economic growth and the eradication of dehumanising poverty in all countries. Regrettably, the evidence, even among the most ardent economic reformers in Africa, points towards exclusion rather than integration, deprivation rather than benefit.

The wealth gap between rich and poor countries is widening, the digital divide is getting worse, and in the face of HIV/AIDS, malaria, TB and other debilitating and fatal diseases, a new gap is emerging, a gap in the value attached to life itself! For while HIV/AIDS is increasingly turning into a serious but manageable disease - like diabetes - in rich countries, it has eroded progress in health in Africa, drastically cutting life expectancies, and threatening entire societies and their well-being.

Evidence points to declining ODA, and low levels of Foreign Direct Investment compared to other developing countries and emerging markets. Terms of trade are not getting better, and Africa's share of world trade has steadily declined over the last decade.

The power asymmetry between few rich developed countries and many developing countries have made a mockery of the concept of sovereign equality of states, and of democratic governance and decision making, of One World, at the international level.

Non tariff barriers against developing countries are a common feature even when exports from developing countries pose no significant threat to the economies of rich countries. Evidence also abounds of efforts by developed countries to extract maximum benefits from the global trading system even when it is already so manifestly skewed in their favour.
The imposition of escalating tariffs against processed products from poor countries, including agricultural products, questions the depth of good faith.

3.0 What Opportunities?
One of the things globalisation is supposed to deliver is opportunity. But opportunities are meaningless without the capacity, the wherewithal and the means to access them. Rich countries must not speak from both sides of their mouths. Political platitudes and moral imperatives do not in themselves create opportunities; actions based on those platitudes and imperatives do.

The rush towards global deregulation, as evidenced by the series of WTO negotiating rounds, does not give sufficient attention to the evaluation of the implementation of previous promises of opportunities from the point of view of poor countries. We can not realistically be expected to have confidence in the WTO frameworks and processes if there is no evidence that previous agreements have worked for mutual benefit. Under these circumstances, the backlashes against globalisation, both in rich countries as well as in poor ones, are perfectly understandable. Further support to globalisation and deregulation can only be built if we have something to show to our people in terms of concrete returns and rewards for earlier conformity to lower stages of deregulation.

For while it is theoretically true that globalisation and deregulation can unleash the forces that drive competitiveness, it is also true that it can end up backfiring. For it is a fact that too rapid deregulation can kill fledgling industries and economies, which is why European integration has taken such a long and laborious path. A child with malaria needs treatment so she won't die; but she can equally be killed if given the dose of an adult!

4.0 How can Globalisation Deliver?
For the poor people in the South, globalisation can only deliver and be meaningful if it addresses their poverty. And this requires a two-pronged approach and global partnerships. African governments must play their part in terms of good governance, as well as sound, prudent, comprehensive and sustained policies to ensure macroeconomic stability. But recent evidence has shown that sustained growth and development requires much more than that. Supply side constraints have to be addressed and this is where we need the practical and sustained support of OECD countries and multilateral financial institutions. This also requires that Foreign Direct Investments access countries in the South with a humane and social face.

Among the supply side constraints that need urgent attention are:

1. Physical infrastructure that inhibits domestic production and regional trade, and increase production and business transaction costs. In countries such as Tanzania you cannot rely on the private sector alone to put up the requisite infrastructure to address all infrastructure related supply side constraints including roads, railway lines, ports, telecommunications, power and water. For these we need increased non-debt creating aid and concessional loans.

2. Africa's share of Foreign Direct Investment's decline from a meagre 3 to 1% over the last decade must be arrested. It should also bring with it the latest appropriate and environmentally sound technologies, including information and communications technologies, and knowledge of markets. Both receiving and exporting countries should guarantee these FDIs in the South.

3. Debt relief measures, including debt cancellation, have to be taken and implemented more expeditiously. The present trend where Africa's external debt increases at a rate of 12% must be arrested and reversed.

4. Improved terms of trade and market access on preferential terms. This can be an added attraction to foreign investors.

5. Capacity building for industrial production must be built. There is no way Africa can benefit from globalisation without industrialisation, especially agro-processing. When Africa exports processed primary commodities it will have goods to sell and deliver and in turn earn incomes to buy goods and services from abroad.

6. Greater investment is needed in the development of human resources. This includes support to social services such as education and health, and the fight against malaria, HIV/AIDS and other diseases that cause or worsen poverty.

5.0 Conclusion
Globalisation can deliver, but only if there is genuine and practical oriented co-operation between North and South, rich and poor countries; if we work for rational and equitable world economic growth and a fair world trading system for sustainable coexistence and shared prosperity. This is one view from the South.