Council for the Development of Social Science Research in Africa
Conseil pour le développement de la recherche en sciences sociales en Afrique
Conselho para o Desenvolvimento da Pesquisa em Ciências Sociais em África
مجلس تنمية البحوث الإجتماعية في أفريقيا


Rethinking Trade and Industrial Policy for African Development

25-27 July 2008, Lusaka, Zambie

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The Council for the Development of Social Science Research in Africa (CODESRIA) invites
abstracts and proposals for paper presentation at the second international conference it is
organising on development as part of its revamped Economic Policy Research Programme.
The first conference within the framework of this initiative was convened in 2007. The theme
of the 2008 conference is: Re-thinking Trade and Industrial Policy for African
Development. The conference is being convened in the context of the Council’s current
commitment to promoting a critical re-thinking of all aspects of socio-economic development
in Africa; it is also held to honour the memory of one of the continent’s most distinguished
development thinkers and former member of the CODESRIA Executive Committee, the late
Professor Guy Mhone. The conference will take place in Lusaka, Zambia, from 25 to 27 July,
2008.
As a domain of research and policy action, trade and industrial policy is recognised as central
to the development prospects of any country, and the countries of Africa are not an exception
in this regard. What has been in contention over the years has been the most appropriate type
of trade and industrial policy that would respond most effectively to the needs of countries at
different stages of development. The intellectual roots of the contemporary debates on trade
and industrial policy go back to the works of the earliest political economists; indeed, it
constituted one of the central concerns addressed by Adam Smith and David Ricardo in their
historic diatribe against the mercantilists. The metaphor of “free trade” that was deployed
against the mercantilists and the interests who were its most vociferous bearers spoke to the
quest for competitive advantage at a time when the modern industrial revolution was
gathering steam. Not surprisingly, those that had an edge in the process of industrialisation
pushed the hardest for “free trade” whilst those with an ambition to industrialise were more
reticent, opting instead either for full protection or selective opening in order to nurture their
nascent industries in readiness for global competition. Clearly, the trade and industrial policy
framework adopted by the earliest industrial economies of the modern period like the United
Kingdom, France and Germany, were crucial to their development in the first instance and the
subsequent efforts they made to protect their historic advantages. Later industrialisers like
Japan and the United States were to learn to calibrate their trade and industrial policy in ways
which enabled them to grow their economies, overcome structural obstacles to their economic
transformation, and then compete with other major players for global economic dominance.
More recent and emerging industrial powerhouses like South Korea, Thailand, China and
India are themselves relying heavily on trade and industrial policy as a key instrument for
their economic development. Their experience suggests, as did the experiences of others
before them, that the ideology of “free trade” is not to be taken on face value, and the actual
practises of states need to be read much more seriously.
During the late colonial period, that enigmatic phase in the history of colonial rule which, for
the first time, saw the germination of some measure of development thinking in the discourses
and policies of the colonial authorities, the very first steps towards the formulation of a
modern trade and industrial policy for Africa were taken. These steps basically entailed the
introduction of tariffs that, at one level, sought to regulate importation and exportation with a
view deliberately to maximising internal revenues, reducing foreign exchange outlays,
improving the trade balance, and strengthening domestic production beyond primary
agricultural production. At another level, the trade and industrial policy pursued during the
late colonial period was aimed at responding to emerging structural shifts in the local and
global economies that also translated into social and political pressures for an acceleration of
the development of the colonial economies. These pressures were aimed at moving the post-
1945 colonial economies beyond the simple production and supply of raw materials, and
ensuring that they occupied a higher position in the international value chain that would at
least begin more effectively employ the expanding pool of skilled labour available in the
colonies. It was out of the trade and industrial policy of the late colonial period that the
earliest experiences of industrialisation, most of it in simple, light manufacturing activities,
emerged in various parts of Africa.
The basic trade and industrial policy framework developed in the late colonial period was
carried over into the post-colonial period and fed into various national strategies that were
aimed, among others, at accelerating the development of the local economy, attracting
domestic and external investment, promoting the home market, encouraging local research
and development, achieving accelerated technology transfer, reducing import dependence,
achieving rapid industrialisation, and increasing local content. As in the late colonial period,
the state assumed a key role in the definition and operationalisation of trade and industrial
policy; indeed, within the context of the state-led model of development which African
countries followed after independence, the state played a commanding role which also
entailed various degrees of central planning. Within this framework, trade and industrial
policy involved the state both as leading actor and a prime facilitator. As actor, the state took
a direct role in investing in the economy, especially in large-scale agricultural projects and
industry. As facilitator, it offered various incentives to private investors and partnered with
them as necessary in order to achieve its defined objectives of accelerating local development.
The tariff regime was central to the trade and industrial policy and it was underpinned by a
philosophy and an incentives structure that sought to discourage the importation of a range of
simple consumer goods, facilitated the importation of intermediate and capital goods, and
protected local infant industries. The consumer goods whose importation was allowed were
brought in either on the basis of temporary waivers to address specific national exigencies or
were subject to heavy duties that aimed at ensuring that they did not squeeze locally-made
alternatives from the domestic market. Subsidies were also employed to reinforce aspects of
the tariff regime put in place as were tax holidays granted to investors in the manufacturing
sector. As post-independence commitments to economic cooperation and integration among
African states gathered momentum, the tariff policies that were pursued were also adapted to
accommodate African cooperation and integration partners. Preferential trade agreements that
similarly had a bearing on trade and industrial policy were also concluded by African
countries with major international economic blocs such as the European Union.
If trade and industrial policy in the first two decades of independence allowed not only for a
central role for the state but also contributed to the growth and expansion of importsubstitution
industries, the state-led model of accumulation within which it was nestled was to
come under severe attack in the period from the 1980s onwards. The grounds on which the
import-substitution industrialisation model was attacked and subsequently dismantled are
many and are all too familiar to merit recounting here in any great detail. Suffice it to note
that the model was criticised for rewarding inefficiency, undermining national
competitiveness, breeding corruption, straining the foreign exchange earnings of African
countries, penalising consumers, discouraging technology transfer, and obstructing the
efficient allocation of investments. The economic crises which African countries experienced
one after the other from the beginning of the 1980s called the state-led model of development
into question and paved the way for the efforts championed by the International Monetary
Fund (IMF), the World Bank and the World Trade Organisation (WTO) to revamp trade and
industrial policy on the continent along lines which were deemed to be compatible with the
“free market” principles for which they were and still remain the frontline partisans. Within
the framework of the structural adjustment programme which they pursued in different
African countries, the international financial institutions pushed for the liberalisation of trade
and investments, the generalised opening up of national economies, the removal of tariff walls
that cushioned local infant industry, the elimination of subsidies that favoured local
manufacturers, the liberalisation of interests and exchange rates, the decontrol of prices, the
reversal of the frontline role taken by the state, the dismantling of national planning systems,
and the introduction of a variety of complementary measures designed to entrench a free
market system, promote an open trade regime, and deepen the role of the private sector in
national economic development. The WTO treaty framework was also to be deployed to lockin
most of the trade liberalisation policies promoted by the IMF and the World Bank, and to
extend the remit of the “free trade” principle to new domains that were binding on members.
Much has been written on the consequences of the shifts that occurred in trade and industrial
policy during the 1980s and 1990s from a state-led to a market-driven model of accumulation.
The consequences observed are multiple but perhaps the most widely discussed has been the
systematic de-industrialisation of African countries, returning many of them to a basic role in
the international division of labour as producers and suppliers of unprocessed or minimally
processed raw materials. At the same time, consumer goods of various kinds have flooded
local economies while revenue from import duties underwent a generalised decline.
Furthermore, in most countries, the promise that the market-based structural adjustment
framework would, by and by, usher in new “sunshine” industries that would be less dependent
on protection and subsidies but, rather forged through free market competition and, therefore,
more resilient did not materialise. Yet, it is inconceivable that Africa could ever hope to turn
the table of underdevelopment without an appropriate trade and industrial policy that would
enable it industrialise itself with all the accompanying direct and indirect benefits. This was a
message that was consistently reiterated in many of Guy Mhone’s own writings even as he
urged African governments to adopt heterodox macro-economic policies in order to have any
prospects of securing their development in a neo-liberal global age. It is to the kind of
developmental trade and industrial policy which Africa needs to embrace that CODESRIA
wishes through the 2008 Guy Mhone Memorial Conference on Development to focus the
attention of African researchers. A thorough re-thinking of trade and industrial policy in
Africa is made urgent by several factors, among them the prolonged economic crises of
African countries that calls for the abandonment of the orthodoxy that has dominated socioeconomic
policy-making over the last two and half decades; the open admission by the World
Bank, after 25 years of zealous experimentation, that the structural adjustment framework
which it so frantically pursued had failed to meet set objectives the immense pressures that
continue nevertheless to be mounted on African governments to toe the line of “free trade”;
and the one-sided push by the European Union for Economic Partnership Agreements (EPAs)
with African countries.

Among the themes that the conference will cover are:

- Trade and Industrial Policy: Conceptual and Theoretical Questions;
- A Re-Reading of Trade and Industrial Policy in the Post-Colonial Period: 1960 –
1980;
- Trade and Industrial Policy during the Structural Adjustment Years: 1980 – 2000;
- Trade and Industrial Policy and the WTO Process;
- Trade and Industrial Policy in the Context of Neo-Liberal Globalisation;
- Trade and Industrial Policy and the Dynamics of Regional Cooperation and
Integration;
- Trade and Industrial Policy and Technology Transfer;
- The European Union - African Economic Partnership Agreements and the Challenges
of African Development;
- Beyond Neo-Liberal Orthodoxy: Trade and Industrial Policy for National and
Continental Development;
- Towards a Developmental Trade and Industrial Policy for Africa: Theoretical and
Empirical Issues; and
- Comparative Trade and Industrial Policy: Experiences and Lessons from other
Regions of the World.




Comments

Daisy - 2013-05-27 05:11:42

There are some interesting points in time in this article but I don’t know if I see all of them center to heart. There is some validity but I will take hold opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as wellhyundai hb20p2xyRRvHIzJHtvRe3b2c