VOL. NO: 49      DATE:
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By Rainer Chr. Hennig


Several African nations have experienced impressive economic and social development, making them middle-income states with a good rating on the Human Development Index (HDI). But success stories like Cape Verde, Botswana and Seychelles now warn other nations on a good track that they feel "penalised for progress". Donors disengage, creditors get more expensive and investors are still not convinced. 

Africa is known as the most needed continent, where development and emergency aid is poured in at a growing paste. But in several countries, as mirrored by the HDI, impressive development has taken place. Africa's most "rich and beautiful" nations now feel the double stigma of being rich, but African. 

Be assured. There are very many success stories on the African continent. Countries that started out with almost nothing at independence but that have been able to lift a great part of population out of poverty by their own force, offering good health and education services and providing economic growth conditions that allow citizens to become consumers. 

The West African archipelago of Cape Verde is the best and most impressing example of this. Without natural resources, underdeveloped by its backward Portuguese colonial masters right up to 1975 and taken over by a radicalised Marxist one-party government, Cape Verde has only experienced true democracy and speedy development since 1990. 

By now, it is by distance West Africa's richest and most developed nation, ranking right on the middle of the UN's HDI for 2006, released yesterday. The HDI measures citizens' purchase power, life expectancy and access to education. Indeed, Cape Verde has surpassed most North African nations and practically all other sub-Saharan states, including South Africa. Only Seychelles and Mauritius, which have had European standards for decades, are still (far) ahead of Cape Verde. 

The Indian Ocean archipelago Seychelles also managed to develop rapidly since independence in 1976. Following a more "Asian road" to wealth, Seychellois governments have mostly been authoritarian, but put great weight on education and social services. By now, Seychelles is within the world's top-50 nations - ahead of EU members Romania and Bulgaria, with a GDP per capita double as high as them - seeing its citizens live for 73 years and having an 80 percent school enrolment rate. 

Also continental Southern Africa has its success stories, despite discouraging UN statistics. At a first glance, the regional power house, South Africa, has been sliding downwards on the HDI since the end-1990s. Well-developed Botswana has even lost out on this UN welfare indicator since the early 1990s. Also well-off Namibia starts seeing this negative trend. 

Here, however, the HDI is hiding the fact that post-apartheid South Africa, Botswana and Namibia have provided their citizens with higher living standards, better education and an improved health care over the last decade. It is the AIDS pandemic that makes the three countries look bad, as life expectancy has dropped dramatically. A newborn South African or Namibian can now expect to live for 47 years, while a Batswana baby only can expect to get 35 years old. Those avoiding AIDS naturally will experience a far larger lifespan - but statistics only reflect averages. 

Indeed, especially Botswana has had an impressive development from a very poor British colony in 1965, to a nation using its natural resources in an exemplary way to enhance popular welfare. Purchase power among the Batswana is comparable to Eastern Europe, Russia, Mexico or Malaysia. The literacy rate is at over 81 percent and school enrolment stands at more than 70 percent. Without the effects of AIDS, Botswana would be among the world's top-70 nations. Namibia would not be far thereafter. 

All these successes however bring new hardships to those governments trying to lead their countries further on, from a middle-income nation to a wealthy state of general welfare. Assisted on their way to become a middle income, donors suddenly shy away, because helping a middle-income nation cannot be defined as development aid by UN standards, instead making it a world free trade distortion. 

At a recent meeting between Botswana's President Festus Mogae and Seychellois Vice- President Joseph Belmont, the government of Seychelles raised the question of being "penalised for progress". Both state leaders said they deplored this policy. "We increasingly feel we are being victimised for the moderate success we have made because we are being excluded from a lot of concessional loans and grants based on our per capita income," President Mogae said during the meeting. 

Also the government of Cape Verde was taken by surprise as the island state was eliminated from the official list of least developed countries (LDCs) a few years ago. The nation's UN Ambassador Luis Fonseca at the time noted this would mean that Cape Verde would lose several advantages. This included "favourable conditions in terms of loans, benefits of technical assistance; all of which was called the privileges of this club to which, apparently, nobody wants to belong, but from where nobody wants to leave," said Mr Fonseca. Government spokeswoman Elisabeth Gomes Fernandes at a meeting in Mauritius a half year later said her country was already noting rapid trends towards reducing official development assistance (ODA), which was of great concern for Cape Verde's economy. 

Successes made so far were "not solid and the country still faces challenges, such as low financing capacity and unemployment," Ms Gomes noted. While Cape Verde has been strongly penalised with reduced ODA and less favourable conditions, the island nation however is also an example of now to "take its destiny in its own hands," as Ms Gomes said. 

Doing well in marketing its successes, the Praia government has achieved large foreign investments in its booming tourism sector and is negotiating a "special relation" with the EU, which could lead to a partial membership of the European economic block and thus secure further EU engagement and growth. 

Nevertheless, countries such as Cape Verde and Botswana strongly feel the "penalising" situation as they are in a limbo state between poverty and welfare, and while progress is not yet properly consolidated. Countries showing signs of moving rapidly up the ladder, such as Ghana and São Tomé, are advised of getting prepared for a sudden stop in foreign aid and making sure they have developed strong economic sectors resisting this "penalty" before that day arrives. 

Indeed, this "penalising" practice can feel unfair and is increasingly questioned as also the opposite "rewarding" of failures policy is well documented. Senegal, for example, slid downwards into the official LDC list during the presidency of Abdou Diouf after a rapidly-spiralling economic crisis toward the end of the 1980s. Failed economic policies made the poverty rate double in the 1990s, unemployment boom and debts manifold. 

In July 1991, President Diouf declared that Senegal "is not a moderate income country but a least developed country." Since that, Senegal slowly has been rewarded by turning into one of West Africa's principal aid receivers. On the positive side, however, this aid is starting to show results as Senegal is now slowly recovering.


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