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Model of the United Nations of Instituto Oriente
Committee: Economic and Social Council
Chair members:
President: Estefanía Grados Porro
Moderator: Yraclis Psihas Fucuy
Secretary: Juan Ramón Pérez Pérez
Topic: African Economy Development
I. Introduction
Africa is increasingly becoming a key player in acquiring, generating and applying
knowledge to development challenges. Yet more
needs to be done to make innovation play its part in
the quest for transformation and diversification of the
African economies.
Africa’s per capita GDP is extremely low and this is
why it is the poorest continent. The weakest
economies in Africa are Somalia and Malawi with as
low as $600 and $596 per capita GDP.
Poverty in Africa is predominantly rural. More than
70% of the continent’s poorest people live in rural areas and depend on agriculture for
food and livelihood, yet development assistance to agriculture is decreasing.
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II. History of the problem:
The economic climate of the 70 states encouraged to borrow money from the
international banking system. The easy money policy and insufficiently productive use
of international loans have, as a result, when the shock wave of the global recession of
the early 80 reached Africa, the increase in economic and financial problems of this
continent.
Being a developing economy heavily
dependent on foreign trade, the African region
is exposed to changes in the international
economy. No wonder their situation, during the
period 1980-1987, has been shaped in large
part by the global economy, which started the
decade of 80 for a deep recession.
In intensity this current recession was the worst since the 30s. While during the period
1970-1979, world production had an annual growth of 4% from 1980-1987 did not reach
more than 2.5% on average. In the time of the recession in 1982, this growth was not
more than 0.5%. Industrialized countries (major markets for Africa) produced similar
results, having its growth rate of 3.3% on
average in the period 1970-1979, and
2.3% from 1980-1987. This growth rate
was 0.3% during the stronger recession.
The world's recession, and the way of
reacting of the industrialized countries,
have influenced the current African
situation. This recession had the effect of
reducing both: the demand for African
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primary products and their export prices. The average annual decline in prices has been
2.5%, bringing deterioration in the terms of trade equivalent to more than 2% per year;
the region’s most heavily tax exports have suffered cruelly consequences due to this
degradation.
Most African economies, especially sub-Saharan Africa stagnated during 1980-2000
and the period ended with many of Africa's national economies in ruins partly due to lop-
sided trade with the rest of the world. Some have argued that economic decline has
been caused by the meddling in the internal affairs of African states by
the IMF and World Bank. Africa also experienced major governance deficiencies,
mismanagement and corruption, and this accelerated poverty further.
III. Current Situation:
To the existing problems of poverty, unemployment, water shortage, malaria, AIDS and
life under most extreme climate conditions, the deep food crisis is adding to all
misfortune. One half of the African continent lives below the poverty line. In sub-
Saharan Africa, per capita GDP is now less than it was in 1974, having declined over 11
percent.
The richest countries of Africa are South
Africa and Egypt. As per 2009 statistics
South Africa’s GDP (purchasing power
parity) was $488.6 billion. Compared to the
rest of countries, the country ranked 26th in
the world. Recession decreased the volume
slightly. The GDP in 2008 and 2007 was
$498.1 billion and $483.1 billion
respectively. Egypt GDP was almost similar at $470.4 billion in 2009, $450.1 billion in
2008 and $419.9 billion in 2007. On purchasing power parity, Egypt ranked 27th in the
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world. If one takes out the GDP of these two regions, the total GDP is less than a trillion
when compared to Italy.
Angola Benin Burkina Faso Burundi
Cape Verde Central African Republic Chad Comoros
Congo Djibouti Equatorial Guinea Eritrea
Ethiopia Gambia Guinea Guinea-
Bissau
Lesotho Liberia Madagascar Malawi
Mali Mauritania Mozambique Niger
Rwanda Sao Tome and Principe Senegal Sierra
Leone
Somalia Sudan Tanzania Togo
Uganda Zambia
Yet many of the countries whose well-being has improved most in the past five years
are in Africa. This list is headed by Angola and includes Congo, Ethiopia, Lesotho,
Malawi, Nigeria, Rwanda and Tanzania. All have enjoyed rapid growth in GDP per
person. But they have also done well at translating that strong growth into improved
well-being: in technical terms, the correlation between GDP per person and well-being
above one in these countries (see chart). Income growth per person has been above
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5% a year in Ghana, Mozambique and Uganda, too. But increases in well-being have
not been quite as rapid as in the best performers .
The World Bank says, while the global economic recovery remains slow, sub-Saharan
African countries continue to grow at a strong pace. The bank has released its latest
economic forecast for the region.
In 2012 sub-Saharan economy grew by 5.8%. Some individual countries had an even
higher growth rate.
Several countries, such as Ethiopia, Rwanda, and Ghana have managed to grow at 7%
or more in each of the past three years. That means 2010, 2011 and 2012.
Several other countries have also been growing at a strong pace, for
example, Nigeria, Zambia, Tanzania and the Democratic Republic of Congo.
Despite the slow global recovery, foreign direct investment, or FDI, actually increased in
sub-Saharan Africa by 5.5% to US$37.7 billion in 2012. In fact, it continued to grow in
Africa while falling elsewhere in the developing world.
Investment in ICT infrastructure in Africa has improved dramatically in recent years,
representing a total of USD 8 billion in 2005, up from USD 3.5 billion in 2000.
Recent Crisis:
Crisis in Libya.
The African Union (AU) on 23 February 2011
was crucial for the international community to
move forward with stronger measures to protect
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civilians. The African Union consistently worked to find a peaceful solution and
expressly rejected any foreign intervention.
Protests that began in the capital of Tripoli spread within weeks across the country to
the city of Benghazi, which became the opposition’s stronghold and was soon subject to
shocking brutality as Gaddafi dispatched the national army to crush the unrest. The
Libyan leader expressed clear intent to continue committing massive human rights
violations by announcing to Benghazi residents that his forces would show “no mercy”
to rebels. Gaddafi’s cruel objective was clear in his potent speech, when he used
language reminiscent of the genocide in Rwanda and stated that he would rather die a
martyr than step down.
Côte D’Ivoire Crisis – 2010.
The political stalemate turned violent and caused the decline of state security,
threatened regional stability, and resulted in gross human rights violations and violence
against civilians. The UN reported in March 2011 that over 1000 people were killed in
clashes, and the UN High Commissioner for Refugees stated that over 500,000 Ivorians
were forcibly displaced, and 94,000 Ivoirians fled to neighboring Liberia out of fear of
violence. Forces loyal to Gbagbo and Ouattara were accused of gross human rights
against civilians which could amount to crimes against humanity.
East African Food Crisis – 2011.
In mid-2011 a major food crisis, affecting 13 million people, was declared across parts
of East Africa. Livestock died, harvests failed, and families’ livelihoods were destroyed.
Tens of thousands of people are believed to have died – mainly in Somalia, where the
first famine of the 21st century was announced.
The crisis continues. There have been significant improvements in some parts of the
region since the emergency was declared, but millions of people continue to need
support to recover, and forecasts for the next rains are poor. Communities need the
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basic services, infrastructure and capacities to ensure they are resilient in future.
Rebuilding lives and livelihoods will take sustained effort for years to come.
Somalia continues to be at the center of the crisis and one of the world’s biggest
humanitarian emergencies, with severe drought exacerbated by years of conflict and
restrictions on aid access by all parties. Insecurity makes Somalia one of the most
difficult places to deliver aid.
Middle East and North African Unrest.
Two months ago, a Tunisian fruit vendor lit a match, starting a fire that has spread
throughout the Arab world. Muhammad Bouazizi's self-immolation prompted anti-
government protests that toppled the regime in Tunisia and then Egypt. The
demonstrations have spread across a swath of the Middle East and North Africa.
Protesters initially took to the streets of Manama last week to demand reform and the
introduction of a constitutional monarchy. But some are now calling for the removal of
the royal family, which has led the Persian Gulf state since the 18th century. Young
members of the country's Shiite Muslim majority have staged protests in recent years to
complain about discrimination, unemployment and corruption, issues they say the
country's Sunni rulers have done little to address. The Bahrain Center for Human Rights
said authorities launched a clampdown on dissent in late 2010. It accused the
government of torturing some human rights activists.
IV. UN Actions:
o United Nations Commission for Africa:
ECA consistently advocates for a predictable and sound macroeconomic policy
framework that is supportive of inclusive growth, private sector development,
employment, value addition, economic transformation and sustainable development.
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Through its publications, such as the Economic
Report on Africa, the Commission disseminates best
practices of specific aspects of economic
management within Africa.
ECA’s policy research aims to share knowledge on
various aspects of development strategy and planning
in Africa, including policy coordination and
implementation, and monitoring and evaluation. Its long-term approach focuses on
tracking and analyzing trends in economic growth, finance, and governance, in
countries of the region and making recommendations on measures for wealth creation
and poverty reduction.
ECA supports the fostering of an enabling environment for the development of the
financial sector, entrepreneurship and private sector operations.
The reduction of the high incidence of poverty on the continent is one of the key
Millennium Development Goals. To achieve the MDGs, African countries must pursue
strategies to promote sustainable and equitable growth and development. In that
regard, ECA assists its member States in formulating and implementing related policies,
as well as in monitoring progress towards the MDGs and the implementation of the
Istanbul Program of Action for Least Developed Countries.
o African Institute for Economic Development and Planning:
The African Institute for Economic Development and Planning (IDEP) is a pan-African
institution created in 1962 by the General Assembly of the United Nations. It began its
operations on 21st November, 1963 with the primary purpose of accompanying and
supporting newly independent African countries in their quest to build their human
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resource capacities as a necessary prerequisite for sustaining independence and
promoting socio-economic development. Its main activities, derived from its mandate,
are organized around a portfolio of capacity development and training programs as well
as a set of policy research and dialogue initiatives. It also offers on-demand advisory
services to governments and public institutions, and serves as a forum for exploration of
alternative thinking on African development.
The Institute functions as a subsidiary body of the United Nations Economic
Commission for Africa (UNECA).
o Ecosoc's 2011 regional meeting for Africa on the millennium development goals:
The Meeting was co-organized by the United Nations Department of Economic and
Social Affairs (UNDESA), in cooperation with the United Nations Educational, Scientific
and Cultural Organization (UNESCO), the United Nations Children's Fund (UNCIEF)
and the United Nations Economic Commission for Africa (ECA), in collaboration with the
Government of Togo. The meeting is part of the preparatory process for the 2011
Annual Ministerial Review on “Implementing the internationally agreed goals and
commitments in regard to education”.
o United Nations Economic Commission for Africa:
Africa appears to have weathered the
recent global economic crisis and
sustained and strengthened its
economic recovery in 2010 by
achieving an average GDP growth rate
of 4.7%, which compared to a 2.3%
increase in 2009. For the continent as a
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whole, real GDP per capita increased by 2.4% in 2010. While UNECA noted the general
uptick in economic activity in 2010, notice should be taken of variations in the rate of
recovery across countries and sub-regions, a subject covered in more detail below. For
example, as has been the case for the last decade, oil-exporting countries experienced
stronger growth than oil-importing countries (5.4% to 3.9%); however, UNECA pointed
out that one significant development was the apparent growth of the non-oil sector in
the oil-exporting countries, presumably an attempt by those countries to diversify their
economies.
UNECA suggested that if this trend were to continue and those countries were indeed
able to achieve success in their non-oil and non-mineral sectors then Africa might be
able to realize its potential for becoming the fastest-growing continent in the world from
2050 to the end of the current century. For the near-term, expectations were that African
growth would continue in 2011 at an average rate of around 5%.
V. Controversial Points:
The African economy is as diverse as the region. The southern parts are prosperous
whereas the other parts struggle for stability. African economy is an extreme one,
however, due to the presence of natural resources, has the potential to grow at a fast
pace.
Over the past 40 years the investment rate in Africa has fallen. Since 1975 the
investment rate has declined to 8.5 percent for the whole continent, compared to
investment rates for the average-performing OECD economy of between 20 and 25
percent, and for East-Asian economies of 30 percent. Furthermore, most of the
investment was skewed in the direction of the inefficient public sector. Recent reforms in
Africa have raised the investment rate, but only slightly.
There are the following debatable points:
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- Unexplored resources
- Lack of infrastructure
- Greater investment from developed countries
- Accelerated development
VI. Conclusion:
The African economy requires an industrial impetus to bring it out of poverty as it is the
store of some of the rarest metals and precious stones. Africa has almost 90% of the
world’s cobalt, 50% of gold 90% of platinum, 70% of tantalite, 98% of chromium, 64% of
manganese and 33% of uranium. Africa is rich in primary products.
For example, South Africa can no longer heavily rely on the global economy to reignite
domestic growth and create jobs. The government, business and labour need to
accelerate the implementation of domestic plans to grow the economy.
Opening up the African economies to market forces of trade and technological diffusion
is also important. While African governments could do a lot to open their economies,
Europe, Japan and the United States could also contribute by facilitating the access of
African products to their markets and by reducing subsidies to their agricultural
products. Natural resources form the basis of the economies of most African countries.
Of primary importance are agricultural products and mineral resources. These
resources are used for subsistence-food to eat-and for commercial purposes-to sell
locally or as exports.
Delegates must give reasonable proposals to solve this problem that has affected this
continent for a longtime.
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VII. References:
United Nations Economic And Social Council
[Link]
Substantive session
« Progress in Africa »
[Link]
OpenElement
The United Nations Economic Commission for Africa
[Link]
[Link]
[Link]
“Innovation & Technology”
[Link]
The National Bureau of Economic Research
“Economic Decline in Africa”
[Link]
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Economy Watch
[Link]
Rural Poverty Portal
“Rural Poverty in Africa”
[Link]
Global Issues
“Poverty Facts and Stats”
[Link]
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