Paul Collier, a leading development economist, has spoken with Deutsche Welle about a new G20 agenda for Africa, which should focus on improving private investment, learning from China, and not repeating the mistakes of the past.
DW: You act as an Africa policy advisor to the German government during the G20 presidency. What is your main advice?
Paul Collier: In my experience, African governments are sick of being preached to. So let's stop preaching and just focus on what we can do to help creating economic opportunities. And then provide a platform or a forum where African governments can make their own commitments, which will signal to investors that Africa is indeed open for business. The German government will be hosting a major Africa conference in June 2017, and it will be a chance for African governments to promote their own investment environments before a business audience. I was brought in by the German Ministry of Finance. It's been a meeting of minds, there have been no arguments or disagreements or tensions. Everybody has been focused around the idea of 'Let's not preach to Africa'.
The German government has put Africa on the agenda of the G20 - also as a result of the refugee crisis. The German focus seems to be on how to stop illegal migration to Europe. What do you think of this approach?
For many years, Africa stagnated when other parts of the world where growing. Africa has a lot of catching up to do. Europe is Africa's neighboring continent, so it's natural that Europe should help in this catch up process. If Africa does not catch up, then Africans will decide that hope lies elsewhere. Even from the perspective of Europe containing migration it's sensible for Africa to generate credible hope for its societies, and Europe can play quite a big role in that by helping to create more economic opportunities in Africa. So that's what the German presidency of the G20 is designed to do, it's about bringing economic opportunity to Africa. But no part of this G20 package is about bribing Africa to take back its citizens. None.
The German newspaper taz has just published research on what it calls a “shift in the European Union's development policy”. According to the paper, the EU now cares more about African governments' ability to stop migration than traditional development goals, such as promoting democracy and good governance. What is your view on that?
That's the European Union. It's not the G20, so it's a completely different policy package. The G20 agenda is not about preaching democracy, or about sending migrants back. The centerpiece of the G20 is what's called 'compacts with Africa'. G20 governments will be invited individually to make various commitments, and in return, African governments can choose to make their own commitments. Those pairings of mutual commitments will be the 'compacts with Africa'. It centers around two clearly defined objectives: one is to improve African infrastructure. The other is to increase private investment to Africa. Both will ignite a process of generating jobs for ordinary Africans.
Can you give me an idea of how much money will be involved in this agenda?
No, I can't. And it's not primarily about a financial transfer. It's about creating a climate in which private investors move money in, and in which African governments can safely and cheaply borrow money. Safely in the sense that they will be able to afford to pay it back, because it's used in a way that is sufficiently productive to generate a revenue stream. That's part of the commitments. We are moving away from handouts to opportunities for investment.
Would you consider this agenda a major shift away from traditional development cooperation?
Yes. In recent years, the focus has partly been on preaching political agendas, and partly on humanitarian agendas. Those are all very well, but neither has been decisive. What we are trying to do with this G20 agenda is to address the fundamentals. If people are able to earn a decent living, they don't need foreign humanitarian assistance.
Are you saying traditional, small-scale development projects should be stopped?
They need to be replaced by stuff that actually works, and works at scale. We need to move away from this boutique mentality of a little project which makes a good photograph - into something that really is transformational. There are a billion people in Africa, so to make a difference, things have got to work at scale. There's a huge amount of private capital in the world. The challenge is to be able to break into that vast pool of private money. No investor is going to make something in a place that doesn't have reliable electricity. That's just one example of vital economic infrastructure.
China has been investing heavily in Africa, and gets to exploit natural resources in return. Is the agenda you have just described inspired by that approach?
I wouldn't say it's inspired by it, but it's not completely different from it. The Chinese have been focusing on infrastructure, and they've avoided preaching. The big problem with the Chinese is the way they've conducted their business. Some of these Chinese deals are very opaque, and there's a fear they're beneficial to China but much less so to Africa.
How could a unified G20 approach be better?
It would be more competitive and more transparent. Any infrastructure project would be subject to a proper process of measuring the costs and the benefits before it's done. It will also be subject to a proper process of competitive tendering, and a proper process of implementation, so that the quality of whatever is being constructed will be checked along the way. African finance ministers have told me repeatedly that they dare not even open some stuff that has been built by Chinese constructors because the standards of building have been so low that they are unsafe. A proper G20 approach to a standardized system can make things a lot better. Of course the Chinese are part of the G20.
Which means the Chinese would also have to change the way they do business in Africa.
Which means they would be subject to a higher level of scrutiny. This would not be scrutiny from the west. It's about building the capacity within African governments to scrutinize all projects properly.
Among African nations trade barriers abound and it's often easier to ship something from Africa to Europe than from one African country to another. What can the G20 or Germany do to change that?
This is obviously a matter for African governments themselves, so we can't go ordering African governments to change their trade policy towards each other. What we can do is related to the infrastructure agenda: one reason why trade is limited is because the physical transport connections between African countries are poor. Another is because the practical bureaucratic organization of borders is very poor. So we can give support for improving that. And for Europe, it would be sensible to do trade deals which recognized the African regional trade blocs, such as the East African Community (EAC) or the Economic Community of West African States (ECOWAS). Instead, Europe has negotiated with individual countries, and that has been quite destructive for the African regional trade blocs. For the European members of the G20, it would be timely to rethink what Europe's been proposing for Africa.
So the EU should not only focus on opening up single countries to European products?
Yes. It's ironic. What Europe should be exporting to Africa - in terms of ideas - is Europe's own trade integration. And instead we've been trying to coerce individual African countries into opening their doors to European imports. African governments are rather wary of that.
Sir Paul Collier is a leading scholar an African development. He is Professor of Economics and Public Policy at the Blavatnik School of Government at the University of Oxford. He has also worked as director of the Research Development Department of the World Bank. In 2014, he received a knighthood for services to promoting research and policy change in Africa.
The Interview was conducted by Andreas Becker.