August 11, 2000
Africa must focus on reversing the flight of capital rather than on aid if it is to achieve the UN target of halving poverty by 2015, says UNDP head Mark Malloch Brown in an interview with AFP Thursday.
Although aid was important, Malloch-Brown emphasized that governance, including "the rule of law, a strong banking system and a stable business environment" were key to "the real issue" of domestic capital formation. He "bemoans the astonishingly high rates of capital flight" that leave the continent just as much as others regret the lack of public aid or foreign investment. UNCTAD estimates net capital outflows from Africa to have doubled between the 1980s and 1990s, reaching 23.5 cents leaving for every dollar in typical African countries it had surveyed, AFP adds.
Malloch-Brown says UNDP is moving away from "a failing strategy" of project aid, to help countries improve their governance. To do this, it is needed to build the institutions and frameworks that could help create the right environment, to get domestic savings to emerge and subsequently attract foreign capital.
The relatively small volume of UNDP aid has to be offset by it "throwing beyond its weight" like a judo player, Malloch-Brown says, adding that while the World Bank can give technical advice, UNDP advocacy may often cause the needed improvement in the "overall public policy environment".
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