By Mario Pezzini Director of the OECD Development Centre
This interview first appeared in Digital Development Debates on October 14, 2015. Read it anew here:
The OECD Development Centre serves as forum where policymakers can find solutions to pressing development questions. We met Director Mario Pezzini on the occasion of the Africa Forum held in Berlin this year, where Africa’s future role in the world economy was discussed. DDD had a chance to talk to Pezzini about the challenges facing Africa’s agriculture and how these are being analysed at the OECD Development Centre. Pezzini stresses the importance of considering overall rural development, not just agricultural development for rural communities. He sees the increase in population as a huge opportunity for Africa that could either help solve other problems or become a curse.
The OECD Development Centre brings together many different perspectives from the North and South. What are the most controversial issues and trends currently being discussed? Is agriculture a topic of discussion in the forum as well?
Mario Pezzini: If we go back in time, the North and the South didn’t share a common understanding of what was going on in emerging markets: In the 90s, 13 non-OECD countrieshad a growth rate more than the double that of OECD countries. Between 2000 and 2010, a total of 83, not just 13, countries enjoyed a growth rate more than double that of OECD countries. This resulted in a geographical shift. The geographical absolute centre of the economy, as stressed by the London School of Economics, was between Europe and North America in the middle of the Atlantic Ocean 40 years ago. The same exercise now locates the very centre between Turkey and Iran. It is moving further east towards China and the South. A shift in wealth is taking place ex normal. Today, the picture is little bit more blurry, but the geography of the world has definitely changed.
A second important point is: What does being a developing country mean today? Are developing countries demanding cooperation and resources in order to follow the same path as developed countries have undertaken in the past? Today we are witnessing a wide range of development paths. There is no doubt that similarities in development do exist, but there are also differences in how development has taken place. We cannot just look back at our own history and say to developing countries: “Copy us and you will be successful”. Ideas and best practices come from everywhere, from developing and developed countries alike. This is the major point we focus on at the OECD Development Centre: The narrative of development has changed, and so has the agricultural sector in development.
Economic partnership agreements (EPA) between the European Union and several African countries are currently facing harsh critique. Many African economies are still monocultures that only sell primary products. Are EPA going to make it even harder for African countries to progress?
Most of these agreements are still under discussion, so the outcomes are not finalised. African countries often lack a local level of services and inputs to develop other types of production.
In many cases, agriculture continues to be based on the family model where a variety of products are grown, but not sold to the national and international markets. The capacity to improve productivity is still weak. How can this mode of production coexist with large-scale farming? How will Africa be capable of further developing rural societies and providing rural support for a different type of agriculture?
This is currently one of the big debates: On the one hand, we have people like Vandana Shiva who support small-scale farming and on the other hand people demanding more investment into modernizing rural economies. Is it possible to modernize small-scale farming as well?
I think that we have to focus on rural development in Africa in general. Agriculture is one important component of rural development, but not the only one. One of the major challenges for Africa, and also a huge opportunity, is the enormous population growth. The population is set to double by 2050. We have seen that China and India benefited from a strong increase in population, which allowed them to enlarge their employment base and improve their societies.In Africa today, there is only one young person for every old person. Population growth will mean there are several young people to support every old person. This will free important energy for growth and development. But what if these young people cannot find jobs, and especially jobs they perceive as decent? Social tensions will intensify. Increase in population is taking place throughout the continent, though more strongly in the centre of Africa, which is exactly the part of Africa where industrial development and the diversification of the economy have been the weakest. It is taking place in urban and in rural areas alike. So the bottom line for rural areas will not just be what to do about agriculture but first and foremost: What will happen to people in general, and youth and women in particular, as agriculture industrializes, as it becomes more and more productive and capable of generating exports? It is likely that its capacity to absorb young people and population in general, will drop in the medium and long term after an initial adjustment. This will likely drive a rural exodus with people leaving for the cities.
If this takes place at the same time and in parallel to manufacturing industrialisation, the population in the cities will increase, but not the number of jobs. We are currently observing jobless growth in Africa. This generates serious social problems in urban areas. The solution to this problem lies back in the countryside, at least in part. We need to come up with development ideas for rural areas where agriculture is crucial. It is not the only sector though, and therefore other types of employment besides agriculture are needed. So is a different type of agriculture besides large-scale intensive production conceivable? The answer is yes, obviously, because there are different types of agriculture that depend on what is produced, the way it is produced, and the market in which it is sold. Strengthening local markets will be crucial so that more sophisticated products can be sold. Producing sophisticated agricultural products does not necessarily require a large scale and the use of chemicals and pesticides. The big picture is still the transformation of rural areas as a whole and not just of agriculture.
We have talked a lot about conflicts, challenges and differences. But in the evaluations the OECD Development Centre undertakes, what practices do North and South agree upon that can help eradicate hunger?
There is a wide capacity for creating dialogue and exchanging experience – despite how it may seem. When Korea held the Presidency of the G20, it introduced a point called “knowledge sharing” to the agenda of the G20 Working Group on Development.
For a long time we thought that the only factor missing was financing for development. We thought that by investing money we could temporarily compensate the poor and then reduce poverty on a permanent basis. The idea that we could also share some of our success stories only came up later. There is one important condition: Coming together at tables where participants have equal voices. We need to build trust among the actors in order for this to happen. I mentioned some areas in rural development, in regional development, but there are many more policy fields in which this exchange could take place.
One point must be clear though: The learning curve does not just run from North to South. It can also go from South to North. I have a good example: conditional cash transfer programmes (CCT), a very well-known social policy for the poor in which the government gives money to the poor. Funds are given to women instead of men and the requirements are that they send their children to school and to see a doctor. The first three countries to implement it were Brazil with the Bolsa Família program, Mexico with Progresa, and Bangladesh with the Female Secondary School Assistance Program II. Today there are more than 83 countries that have applied this scheme, most recently the US in New York City. So you can easily see that you can learn from all sides.
Interview: Frederik Caselitz/ Prisca L. Watko
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This article should not be reported as representing the official views of the OECD, the OECD Development Centre or of their member countries. The opinions expressed and arguments employed are those of the author.
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