regional integration presentation by mark d. tomlinson
TRANSCRIPT
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REGIONAL INTEGRATION
Presentation by Mark D. Tomlinson
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AFRICA: VERY LARGE, VERY SMALL
• Africa is larger that the US, Europe, Brazil, Australia and Japan combined.
• GDP of 47 economies of sub-Saharan Africa in aggregate approximately GDP of Belgium
• Median GDP about $4 billion; a modern city
• Basic services to median population of 15million?
• Infrastructure over median land area equivalent to France?
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SQUARE MILES POPULATION (2004)
Africa 11,715,721 885 million
Belgium 11,787 10,4 million
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SQUARE MILES POPULATION (2004)
Europe 3,120,066 584 million (excl. Russia) Mozambique 308,653 19,2 million
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SSA GROWTH RATES
Growth• Sub -Saharan Africa 1995-2003 3,3%
SSA in 2003:• 19 countries < 3% pa• 14 countries 3%-5% pa• 13 countries > 5% pa
SSA in 2004: 5.0% Best in 8 yrs!• But no country will reach MDGs• MDGs require sustained growth of 7%pa. How?
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NEED MORE EXPORT LED GROWTH
Many countries have not been able to take advantage of trade opportunities because of supply side constraints throttling competitiveness.
• Africa’s share of global trade continues to slide: 3% in 1980 about 1.5% today.
• Intra-regional trade lowest for any region, average about 10% of GDP
• FDI remains about just 1% global total, with most going to South Africa.
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COMPETITIVENESS ISSUES
• Capital inefficiencies in many sectors: increases to manufacturing costs
• Serious infrastructure deficiencies: road and rail networks, ports, power systems, telecommunications
• Trade facilitation deficiencies: trade policy, customs regulations and administration, customs facilities
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CAPITAL OUTPUT RATIOS
Country GDP range Period Av. CapitaOutput
Ratio
Thailand $520-609 1963-1966 0.45
China $440-603 1993-1996 0.32
Indonesia $500-600 1980-1985 0.28
SSA $540-590 1990-2003 0.14
SSA (inc. SA) $560-590 1997-2003 0.18
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MAINSTREAMING REGIONAL INTEGRATION WITHIN THE AAP
OBJECTIVE:
Strengthen growth, particularly export-led growth through incorporating regional approaches into national PRS and CAS
PRIORITIES:
* Policy reforms to improve the environment for private business, investment and trade;
* Infrastructure, facilities and systems to sharpen competitiveness and improve agricultural production and
trade facilitation;
* Improved service delivery through regional approaches.
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MAINSTREAMING REGIONAL APPROACHES IN THE AAP
PRIORITIES:
* Support to selected Regional Economic Communities (RECs)- assigned key roles for implementation of NEPAD- main fora for regional policy debate at senior level- key roles in preparing priority regional investments
* Capacity development- nationally and in RECs; important for progress on each objective
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REGIONAL APPROACHES: GROWTH
Incorporating regional programs in CAS will aim to reinforce support for growth in four areas:
• Implementation of customs unions. Harmonized regional customs facilities and systems
• Gap-filling in regional infrastructure. Focus on trade corridors, regional power systems and international telecommunications
• Financial sector development and integration. Focus on broadening access to financial services and introduction of trade-related instruments
• Agricultural productivity. Regional approaches to enhance agricultural research and technology development.
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REGIONAL APPROACHES: SERVICE DELIVERY
Main thrust will continue to be through national engagements. Regional approaches will complement in three areas:
• Management of water resources at basin level – water supply, irrigation, flood control, environmental objectives;
• Improving outcomes in tertiary education, health care through rationalizing facilities regionally;
• Combating migratory diseases, malaria, HIV/AIDS, tsetse.
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REGIONAL APPROACHES: RECs
For selected RECs, move from support for specific TA to program engagements focusing on harmonization of main donor support (jointly with AfDB.) Focus:
• Capacity development of the REC closely aligned with near-term capacity needs in view of regional deliverables set by member states; and
• Strengthening capacity of the REC to select and prepare priority regional investments, including through establishment of multi-donor sub-regional funds.
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REGIONAL APPROACHES: CAPACITY DEVELOPMENT
•Improved regional statistics•Stocktaking of regional analyses•Identification of capacity development needs•Identification of roles: RECs, ACBF, others•Capacity building in specific contexts: near term deliverables and longer term needs.•Harmonization of approaches•Funding, implementation and M&E.
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REGIONAL PROGRAMS TO DATE•Existing portfolio of 14 projects, including 3 GEF
•Total IDA commitment $632 million
•Total disbursed $84.6 million; average age 2.5 years
•Examples: West Africa Gas Pipeline, WA Power Pool,
Emergency Locust Program, Regional Trade Facilitation,
Capital Markets Development
•FY05: $265 million in six operations
•Strong pipeline ($2 billion) for IDA 14 in transport, energy,
water, telecomms, financial sector, human development,
and agriculture
•Strong support from AFR management
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OPERATIONAL PRIORITIES* STRATEGY
- Lessons: IDA 13 retrospective of regional programs (equivalent to CPAR) plus OED review
- Regional Assistance Strategies (RAS): two in FY06 based on existing regional PRS, two in FY07. Explicit linkages into and among CAS
* NEW OPERATIONS- Strong demand for regional investment financing under NEPAD STAP. Build regional program to $500m pa. FY06 program $400m plus.- Non-lending engagements with RECs focusing on harmonization, gap-filling TA
- Capacity development* IMPLEMENTATION
- Partnership approaches- Identify best practice. Invest significantly
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Operational ChallengesStaffing- Ongoing. FY06: CD16 staffed as full CMU. Senior field positions plus
Washington staff
Strategic Approaches - More effective RECs: policy and projects. Capacity.- Additional regional PRS, improved regional PRS- Outward looking CAS
Operations
- Creating best practice: lending, non-lending, AAA
Budget- Regional working comparatively expensive
- Invest in AAA to strengthen knowledge base for capacity development, investment.
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Thank you!
More impact through regional approaches