Overview of the Main Issues

• Author: Saleh M. Nsouli and Françoise Le Gall

The articles that follow examine how Africa can reposition itself to take full advantage of globalization-while minimizing the risks in the process-to accelerate economic growth and reduce poverty. Together, these articles sketch a road map that could help make globalization work better for Africa. This issue is particularly important given Africa's position in the global economy: its share of world trade has dwindled, foreign direct investment in most countries has remained at very low levels, and the income gap relative to advanced countries has widened. Today, more than 300 million people in sub-Saharan Africa live on less than $1 a day. Of all the regions in the world, sub-Saharan Africa has the largest proportion of people-48 percent-living in extreme poverty. The New African Initiative recently adopted by African leaders is a response to these challenges. It does not promise "business as usual." Rather, in the context of an increasingly interdependent world, it calls for a more integrated and determined approach to fighting poverty in Africa.

In a recent speech on the New African Initiative, and more generally, a global partnership for African economic development, Horst Köhler, Managing Director of the IMF, underscored the importance of a comprehensive approach for addressing critical questions about globalization. Such a framework, he added, "must respond to the fact that all humanity shares one world, and must lay the foundation for more broadly based prosperity." And in recent remarks, Anne Krueger, the IMF's First Deputy Managing Director, noted that thanks to globalization, parts of the world have broken out of poverty and improved their living standards, but that more needs to be done for those who have been left behind. She emphasized that globalization will continue to be a vehicle for closing the gap between the industrial countries and the rest of the world.

These issues formed the backdrop to a high-level seminar on globalization and Africa, which was held in Tunis on April 5-6, 2001. The seminar, organized by the IMF Institute in the context of its program of activities with the Joint Africa Institute and cohosted by the Central Bank of Tunisia, brought together ministers, central bank governors, and other officials from 14 African countries (including 3 North African countries), representatives of a number of regional organizations, IMF Executive Directors representing African countries, and senior IMF staff.

The...