IMPROVING UNDERSTANDING THROUGH INTERLINKAGES

ECONOMIC AND ENVIRONMENTAL CHANGE: THE REACH OF GLOBAL POLICY

Economic activities straddle national boundaries and are affected by global, regional and national processes. Global policies and practices have direct impacts, at national and regional levels, on environmental sustainability and human well-being – sometimes increasing opportunities, but at times decreasing opportunities. An interlinkages approach can be effective in maximizing opportunities and minimizing negative impacts. Such an approach can offer opportunities for a better understanding of the globalregional- national links and set the basis for more effective institutional and policy responses.

Africa has made dramatic economic improvements since 2002 – in addition to impressive growth rates, inflation is also at an all-time low. In 2004, Africa achieved a growth rate of 5.1 per cent (OECD Development Centre and AfDB 2005), the highest in the last five years and significantly higher than the rates of 3.7 per cent in 2003 and 2.9 per cent in 2002 (AfDB 2004). However, the challenges facing Africa remain immense. Despite the richness of its biological, mineral and human resources, the region remains poor and levels of human well-being are in decline for many countries (UNDP 2005). The 2005 Human Development Index (HDI) shows that more than 20 countries in sub-Saharan African (SSA) have suffered dramatic reversals in human development since 1990. Sub-Saharan Africa must grow an average 7 per cent per year to reduce poverty by half by 2015 (AfDB 2004). Food insecurity threatens millions each year, especially in the Horn of Africa and Southern Africa. Africa is home to more malnourished people than any other continent (UNEP 2005) and hosts 27 per cent of those who lack access to safe water at the global level (World Bank 2004).

Africa and its people face many obstacles in turning their natural assets into wealth. These have their roots in policies and practices at the global level: the arenas of international trade, development aid, and international finance and investment influence the broad economic and political setting that Africa finds itself in, places it at a distinct disadvantage and perpetuates poverty (WRI and others 2005). Africa’s economic, political, social and cultural systems are increasingly susceptible to globally-driven policies due to globalization. Box 8 shows how closely linked national economic performance is to the global economy as well as to environmental change. The challenge for Africa lies not only in how to make economic activity more efficient, in terms of production and environmental costs, but also in how to deal with the ramifications of global imbalance and its impacts on sustainable development and human well-being. The opportunities offered by globalization need to be harnessed while, at the same time, Africa must take measures to protect and cushion itself from potential negative effects.

Box 8: Global–national economic linkages
Immature desert locust swarm (covering about 3-6 km²) milling over a field of harvested millet north of Bambey, Senegal.
Source: M. de Montaigne/FAO

In the period 2004 to 2005, global economic recovery and the general rise in global commodity prices gave a positive impetus to African oil and metal exports. Some oil exporters also benefited from new oilfields in Southern and Central Africa (Angola, Chad and Equatorial Guinea). However, countries in Western Africa faced losses from lower prices for cotton and cocoa, and the persistence of cotton subsidies elsewhere.

Currency fluctuations also affected economic performance. The sharp appreciation of the euro adversely affected the franc zone countries, while the strengthening of the rand has affected the Southern African economies whose currencies are pegged to it.

This high dependency on global factors makes African economies extremely vulnerable. This is compounded by high dependency on natural resources and a relatively high level of vulnerability to environmental change. In the 2003- 2004 period, favourable weather conditions in Eastern, Central and Southern Africa translated in a rebound in agricultural production (mainly in Ethiopia, Malawi, Zambia and Rwanda). In contrast, agricultural output in Western Africa suffered from locust infestation, although its impact was limited by early treatment of the affected areas.

Source: OECD Development Centre and AfDB 2005