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Statement at the Annual Meetings of 35th AfDB / 26th AfDF (Cairo, Egypt / May 25, 1999)

Japanese

Statementby Mr. Ken Yagi, Deputy Director-General of the International

 

Bureau, and Temporary Governor for Japan, at

the 35th AfDBand 26th AfDF Annual Meetings

in Cairo on May25, 1999

 

1. Introduction

          Mr.Chairman, distinguished Governors, Mr. President, ladies and gentlemen:

          Itis a great pleasure for me to address the 35th Annual Meeting of the African DevelopmentBank and the 26th Annual Meeting of the African Development Fund. On behalf of theGovernment of Japan, I would like to express my gratitude to our hosts, the Government ofthe Arab Republic of Egypt and the people of Cairo, for their generous hospitality.

          Iwould like to take this opportunity to pay tribute to the efforts of the Bank to implementreform, under the leadership of President Kabbaj, on both organizational and operationalfronts.

 

2. Agenda for the African Economies and theRoles of the AfDB Group

          Mr.Chairman:

          Forthe past several years, the African economy has been steadily recovering from thestagnancy of the early 90s--reflecting reform efforts in each country of the region. Yetthe fight against poverty is far from over. In fact, poverty reduction continues to be thelargest issue for the region. Another major issue is the debt problem, particularly inSub-Saharan African countries, which is aggravated by insufficient inflows of privatecapital.
          Furthermore, economies in theregion are faced with such difficulties as desertification and an economic structureexcessively dependent on certain primary commodities.

          Toaddress these issues and to achieve sustainable economic growth, I believe it is essentialfor each African economy to do its utmost with a sense of ownership on the one hand, andon the other hand, for the international community to support such efforts based on aspirit of equal partnership.
          It is in this context that theAfrican Development Bank is expected to play a significant role. While taking fulladvantage of its African character, the Bank should actively participate in the efforts ofAfrican countries to improve their governance and enhance policy dialogue with eachcountry in the region to address issues in areas directly related to poverty reduction aspolicy priorities. These issues include agricultural and social development.

          TheVision Statement, drafted in March, and the strengthening of collaboration with the WorldBank in recent months are highly welcome in this respect.

          Withregard to the debt problem of heavily indebted poor countries (HIPCs), our Government isof the view that further debt relief initiatives should be taken by the internationalcommunity to help alleviate the debt burden to a sustainable level that enables countriesto regain their capacity to pursue development.
          Based on such a policy, theGovernment of Japan has proposed a further increase in the debt relief ceiling forbilateral ODA claims from the current 67% to 100%.

         However, the initiative should be based on fair burden sharing among creditors and theownership of the HIPCs. It is particularly important for debtor countries to continuetheir efforts toward sound economic management and economic reform. Otherwise, it willonly invite moral hazard.

 

3. Agenda for the African Development Bank

          Mr.Chairman:

          Iwould like to focus on three challenges which I believe the Bank must address.

          First,the strengthening of the financial resources of the African Development Bank Group isessential for the Group to play a leading role in development of the region.
          In this respect, I welcome thesignificant progress made on two accounts. One is the Fifth General Capital Increase(GCI-V) which is certain to take effect shortly, following the agreement reached last yearthanks to the several years of efforts of Member countries. The other is the promptconclusion of the meetings on the Eighth Replenishment of the African Development Fund(ADF-VIII).
          Japan has already accepted theGCI-V-related Amendments of the Agreement, and has also voted for the Governors Resolutionfor the ADF-VIII. Our policy to support the African Development Bank Group will remainunchanged. I hope that other Members will follow suit so that these two financialresources will be strengthened as soon as possible.

          Second,there has recently been an increase in arrears to the Bank for economic reasons. Greaterattention must be paid to this financial problem of the Bank. Increased arrears will havea negative impact on the Banks fund-raising costs, and will eventually affect borrowingMember countries of the Bank. Thus, it is essential for the Bank to press countries inarrears even harder to reduce their loan arrears, while countries in arrears must alsomake further efforts to improve the structure of their fiscal spending and revenues and tostrengthen their debt management.
          Japan has made it clear that itstands ready to support such efforts through the Policy and Human Resources Development(PHRD) Fund, and the Bank is now preparing a debt management seminar.

          Thethird challenge relates to human resources development, which is prerequisite for theestablishment of ownership among African countries. To this end, our Government hasprovided support on various occasions through the Policy and Human Resources Development(PHRD) Fund at the Bank.
          In this respect, I also welcome theinitiative the Bank has recently taken, together with the IMF and the World Bank, inestablishing the Joint Africa Institute--a new African training institution. I hope thatthe Institute will turn out many talented persons for the countries in the region, andwill serve as the basis for their ownership. For our part, we plan to study whatcontribution we might be able to make to the Institute.

 

4. TICAD-II Follow-up

          Mr.Chairman:

          Iwould now like to turn to the Second Tokyo International Conference on African Development(TICAD-II) which we hosted last October in Tokyo.

          Theconference saw the participation of many high-level people from countries in Africa, Asia,Europe, and America, as well as international organizations. As a result of thecomprehensive discussions on social and economic development, the Tokyo Agenda for Action,a set of specific action-oriented guidelines for African development, was adopted.

         Japan is ready to do its part to help achieve the specific goals mentioned in the TokyoAgenda for Action--such as ensuring by 2005 that at least 80 percent of children completeprimary education--in collaboration with African countries and development partners, sothat ordinary people in Africa can have bright hopes for the 21st century.

          Theconference also generated momentum for African development in the international community.To maintain that momentum, Japan plans to host a number of fora and events later thisyear, such as the Asia-Africa Forum III and the Africa-Asia Business Forum, with thecooperation of relevant countries and institutions.

 

5. Conclusion

 

          Mr.Chairman:

          Inclosing, may I emphasize how important it is for the African Development Bank, both itspresident and staff, not to allow their past achievements in Bank reform to lead tocomplacency. This is essential for the Bank to establish itself as a sound and efficientorganization, and to provide even more effective support for African development.

         While maintaining the sense of emergency that existed at the outset of the currentadministration, the Bank should continue its reform efforts and try even harder toaccomplish the mission of the African Development Bank Group.

         Thank you.