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Sir Stern and Prof. Collier Give Press Conference
After making presentations on Monday in Tunis, Sir Stern and Prof. Collier gave a press conference on Tuesday as part of the Bank Group’s eminent speakers’ program in which they took questions relating to climate change and the Bank’s role in post-conflict recovery in Africa. Asked whether the Bank Group was doing enough to help the continent reverse the effects of global warming and climate change, Sir Stern indicated that the Bank Group’s actions were in keeping with recommendations made during the G8 Summit in Gleaneagles. He indicated that "the overall costs and risks of climate change will be equal to the loss of 5% of the global GDP each year. If all the range of risks and consequences are taken into account, the damage could reach 20% of GDP or more," he said, adding that "some 145 to 220 million additional people will be compelled to live on less than 2 dollars a day, with about 165, 000 to 250,000 additional deaths per year likely to occur among children in South Asia and Sub-Saharan Africa by 2100." It’s the entire development economy that will be affected by climate change and, by extension, the way development agencies work, he stressed.
Meanwhile, Sir Nicholas Stern, professor at the London School of Economics, on Monday, made a presentation on "The Economics of Climate Change: Lessons for Africa". Addressing Bank staff, diplomats and senior Tunisian government authorities, he indicated that projected impacts of climate change included falling crop yields in many poor countries, the disappearance of small mountain glaciers, significant decreases in water availability, rising sea levels that threaten major cities in certain parts of the world as well as extensive damage to coral reefs, rising intensity of storms, forest fires, droughts and increasing risks of large scale shifts in climate systems.
He highlighted the relationship between global warming and water, indicating that the phenomenon was characterized by cycles of extreme drought and floods. After establishing the effects of global warming which derive from human action, Sir Stern warned that if immediate actions were not taken, it would be hard to reverse the effects of human action. He advised that global warming was a global issue that required an international response. He highlighted that most of the greenhouse emissions responsible for climate change were the handiwork of rich Western countries which were responsible for 75% of emissions, adding that these countries were supposed to play a leading role in the reduction of these emissions. After many studies, he said, temperatures would increase by 2 or 3 degrees Celsius more in the future.
Development, he said, was the first and best response to climate change, adding that the state must be involved in the process. In Africa, he advised, we need to change the way we design our infrastructure, rethink our agriculture and irrigation system, bearing in mind that the continent has an advantage over other continents and should approach growth differently and adopt new behaviors.
He stressed the need for information to be shared among actors with a view to having good weather forecasts as this is the ideal way to deal with many natural catastrophes. Africa, he said, was particularly vulnerable to the impact of climate vulnerability. Climate change, he continued, would threaten all aspects of the development agenda. He underscored that Africa was already vulnerable to climate change and had the least capacity to respond; adding that the costs of climate change could be reduced through both adaptation and mitigation. He pointed out that adaptation was the only way to cope with climate change impact over the next few decades. He however sounded optimistic, indicating that there were opportunities to adapt, produce low carbon development, improve land use and reduce deforestation as well as shape international cooperation. Africa, he stressed, could benefit from global initiatives for clean energy investment, reduced deforestation and the development of global public goods.
Development, he stressed, was key to adaptation as it enhances resilience and increases capacity, emphasizing that adaptation to current climate variability could reduce the cost of natural disasters. He however warned that adaptation required economy-wide planning and regional cooperation. He indicated that leadership and coordination were essential in this project, stressing that governments had a fundamental role to play.
Professor Paul Collier, for his part, focused during the press conference on the assistance that development institutions such as the Bank Group could provide to post-conflict countries. "These strategies must be different from other development policies," he stressed, adding that "the legacy of conflicts is the highly dysfunctional economic policies that post-conflict countries inherit." He also focused on the huge costs internal conflicts generate in neighboring countries. He suggested that the Bank Group had a huge role to play in post-conflict countries given its African identity as well as the confidence and expertise it has. He urged neighbors of post-conflict countries to work together to check situations of conflict, suggesting that a reduction in arms was one of the ways to ensure post-conflict countries did not find themselves dealing with the same situation shortly after. He underscored the importance of aid which, he said, could deliver high payoffs in post-conflict countries, adding that most multilateral institutions such as the Bank Group were appropriate for such situations.
Meanwhile, during a joint presentation with Sir Stern, Prof. Collier noted that the consequences of violent conflicts were enormous. He pointed to research that shows that post-conflict societies generally face an alarmingly high risk of reverting to conflict. The first priority of any government, he said, was to reduce these risks. He identified what he referred to as distinctive political and economic opportunities for reducing the risk of reversion to conflict.
On the economic front, he pointed to efforts at reconstructing infrastructure; managing capital flight and repatriation; as well as managing commodity booms. He further spoke of distinctive government revenue and spending strategies that identify both sources of revenue and expenditure systems. Regarding revenue, he identified the taxation of earned income, arguing against the tendency to increase taxes on the formal sector and in favor of auctions in the award of concessions for commodity extraction. Mr. Collier spoke out against deficit spending – a predilection in which many countries coming out of conflict tend to find themselves. Turning to what he called the mechanics of public expenditure, Professor Collier pointed out that the typical post-conflict country generally inherits a history in which governments have never managed to build an effective public sector even prior to the civil war. So instead of attempting to build a conventional system of public administration within spending ministries which did not work even under normal circumstances, he argued that it would be better to adopt the more radical approach of leapfrogging to a more modern administrative technology. He proposed a design based on an incremental service provision to be delegated to public agencies known as Independent Service Authorities, a model he said was similar to that adopted by the Palestinian authorities. The role of the ISA would be to contract with a range of suppliers of core public services, health care and education, channeling money to them in return for the supply of services to users. Professor Collier turned his attention to the implications of all this for the AfDB.
He pointed to three distinctive roles: advice, finance and advocacy. He said the Bank should have a portfolio of projects in post-conflict countries that is distinctive because it is anchored in the discourse with government and best reflects its priorities. The Bank, he said, should have an advisory role that is distinctive and hands-on. He concluded on the need for a role based on regional public goods, giving as an example advice and certification on how to sell mineral rights.