Download regional integration

REGIONAL INTEGRATION
Presentation by Mark D. Tomlinson
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?
Africa
Belgium
SQUARE MILES
POPULATION (2004)
11,715,721
885 million
11,787
10,4 million
SQUARE MILES POPULATION (2004)
Europe
(excl. Russia)
Mozambique
3,120,066
584 million
308,653
19,2 million
SSA GROWTH RATES
Growth
• Sub -Saharan Africa 1995-2003 3,3%
SSA in 2003:
• 19 countries
• 14 countries
• 13 countries
< 3% pa
3%-5% pa
> 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?
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.
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
CAPITAL OUTPUT RATIOS
Country
GDP range Period
Av. Capita
Output Ratio
Thailand
China
Indonesia
$520-609 1963-1966
$440-603 1993-1996
$500-600 1980-1985
0.45
0.32
0.28
SSA
SSA (inc. SA)
$540-590 1990-2003
$560-590 1997-2003
0.14
0.18
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.
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
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.
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.
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.
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.
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
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
Operational Challenges
Staffing
- 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.
Thank you!
More impact through regional approaches