Welcome and introduction
Thank you, Makhtar, for your fine opening remarks and for generously agreeing to have the Africa Region sponsor today’s event.
I also want to thank the Committee for the Stanley Please Memorial Lecture, or as I prefer to call them, The Gang of Six—Jim Adams, Bob Liebenthal, Stephen O’Brien, Praful Patel, Richard Stern, and Martin Wolf—for taking the initiative to put this event together. The committee has worked hard to turn a good idea into reality.
And to our good friend, Shivakumar, and the leadership of the 1818 Society, I want to express appreciation for enthusiastically endorsing and putting the prestige of the Society behind an event honoring a great icon of the Bank, Stanley Please.
In welcoming you all, I want to acknowledge the presence of several members of the Please family including Brian and his wife, Moira, who have traveled from London to join us as we pay tribute to Stanley.
Finally, a special welcome to Ambassador Amina Salum Ali, the highly-respected representative of the African Union in Washington, and Kwesi Botchwey, my friend and compatriot, and a friend to anyone who worked on Ghana during Kwesi’s days as finance minister. Amina and Kwesi will participate in the panel discussion that Martin Wolf will be moderating soon.
Friends, colleagues, and guests, thank you all for joining us today. I’m honored to have the opportunity to participate. The Gang of Six cajoled me into making this keynote address, and while I thank them for the invitation, I am not sure what it says about their judgment.
As I look around this atrium, I see a “who’s who” of development leaders and experts spanning many decades. I see so many wonderful people, some my mentors, many my friends. I see people I’ve worked alongside, admired, and looked up to for as long as I can remember. It’s privilege to be among you today.
Being here, I’m reminded of when I joined the Bank in 1974. The Bank was much different in those days, in both its internal culture and external activities. Its ambitions were smaller, its focus was narrower, and its opportunities, at least to young African men and women, were very limited. But, over the decades since, an evolution in thinking took place—a dramatic evolution—and Stanley was a key link in the chain. He foresaw a different role, a much more aggressive and active role, for the Bank from moment he arrived in 1963. He believed the Bank’s economic strength could be used in poor and developing countries as a catalytic force for change, not simply an avenue for aid. He was ahead of his time in his belief that the Bank should act faster, respond in real time when needed, and work collaboratively, on the ground, with local people and institutions.
So we’re here at this event in his name, for one reason that would certainly thrill him—to discuss development in all of its technical details—and another that would probably frustrate him—to give him a little credit. We’re here not to memorialize Stanley, but to celebrate these things he held most dear—his profession, his passion for good policy, his hope for economic equality and opportunity. So let’s celebrate Stanley and his enduring contributions to the Bank and to the field of global development, particularly as those contributions relate to reducing poverty in Africa, one of his great motivators. Since he began his career, the way the world thinks about aid and development has evolved, and we’ve seen the Bank’s relationship with Africa evolve as well, from paternalistic lender to productive partner.
Let’s also celebrate the progress Africa has made in recent decades, a period of encouraging economic growth in countries once considered lost causes. Now, instead of having the same old discussions about what it will take for Africa to turn the corner, we’re able to discuss what it will take to remove the remaining bottlenecks to prosperity—which are significant, but no longer seem insurmountable.
And finally, let’s celebrate the achievements of all those who devote their careers to improving development outcomes, in Africa or anywhere else—people like Stanley, and the countless others he helped influence and inspire to carry forward similar goals, across all walks of life. When considering my remarks today, I realized that the power of influence is an unavoidable theme. Sometimes, we may see the direct result of our actions almost immediately. But mostly, our influence takes time to play out, and we have to believe that the decisions we make, the courses we set, and the goals we pursue are eventually proven to do more good than harm.
In this way, celebrating Stanley’s legacy, and his dogged devotion to getting policies right for long-term development success, seems like a perfectly appropriate platform for celebrating Africa’s progress, and looking ahead to its brighter future.
Celebrating Stanley Please
Let me begin by talking a bit more about Stanley. I certainly can speak from experience. I first met him in 1975, a year after I joined the Bank, when I applied to be the country economist for Sudan. I interviewed with both the senior economist, Lyle Hansen, and division chief, Anders Jeuen. It went well, and we hit it off immediately. They recommended me to the country programs director for Eastern Africa—Stanley Please.
Guess what? Stanley Please and I did not hit it off. At least, he didn’t want to hire me. He had nothing against me personally. He just didn’t think I had what it would take to meet his high standards. But I didn’t take no for an answer, and that either impressed him or wore him down. For me, it was an early lesson in humility and perseverance. It helped that I had come through the Bank’s Young Professional program. Stanley was one of the strongest supporters of the YP program, which aimed to bring young economists, of diverse backgrounds and ethnicities, to the Bank. At a time when most Bank managers seemed unsure of this radical idea, Stanley enthusiastically took YPs under his wing, and he used his knowledge of the Bank to guide them.
His division became a highly sought destination because of his reputation as a tough but determined mentor. I can’t lie; my time in Stanley’s department was a grueling entry into professional development, and he and I often butted heads. But he made me prove myself. Stanley demanded excellence of all those around him, a reflection of his own determination to make the Bank a better place. That determination was evident from the beginning. One of his early contributions was a paper based on his observation that governments rarely retained fiscal surpluses, undermining the popular idea that government savings could be used to finance development projects. This insight became known inside the Bank as the “Please Effect,” and it remains a significant contribution to the literature of fiscal economics. The paper was published despite strong objections from the IMF, because the research publicly questioned Bank and IMF practices—a risky proposition in the early 1960s. As Stanley wrote in his autobiography: “Some ten years or so later, and ever since, the main conclusions were adopted as a central feature of operations.”
Stanley’s tenure closely mirrored the Bank’s evolution from an institution with a focus primarily on project financing to one where policy and policy analysis were leading considerations. He was driven by a fundamental belief that governments needed to be capable, so as to ensure economic growth and efficiency, and that they needed to be accountable, so as to work in the best interests of their populations, especially the underprivileged. At the same time, he believed that the Bank’s emphasis on project lending failed to address the systemic government problems in Africa, a key theme in his famous book of essays, “The Hobbled Giant.”
As a result of his thinking, Stanley became one of the first and foremost champions of policy reform at the country level as a precondition to effective aid. He was a strong advocate for linking the Bank’s lending to broad policies rather than specific projects such as dams, roads, and telecoms. The underlying idea—that it was impossible to promote development through project lending if the overall policy and institutional environment was distorted—has been proven correct over time, a fact especially evident in sub-Saharan Africa.
Stanley played a key role in the design of the Structural Adjustment Program, the overall framework for early policy-based lending. We know the program was poorly implemented and had many adverse effects, but it spawned vast improvements in macroeconomic policies, which became a critical building block for Africa’s resurgence. Stanley also believed in the potential of regional institutions and the benefits of a broader market. When the East African Community was on the verge of breaking up in the late 1970s many in the Bank were willing to let it go. Not Stanley. He pushed hard for the Bank to adopt a positive stance. He was unsuccessful but today his vision is alive and the new East African Community is larger and stronger than ever.
I also recall that in 1981 as a member of the task force that prepared the controversial Bank report “ Accelerated Development in Sub-Saharan Africa: An Agenda for Action,” or the Berg report as it became known, Stanley encouraged me to co-author a paper with him in which we made the case that despite the seemingly differences in approaches between the Bank on the one hand and the Organization of African Unity (OAU) and the Economic Commission for Africa (ECA) on the other, all three institutions were pursuing the same objective: a developed and prosperous Africa.
There was a major problem with that argument however. The Berg report had come to be seen as the forerunner to structural adjustment lending and our conclusion was seen in many African circles as heresy. Judging by the strong partnerships that exist today between the Bank and the African Union and other regional organizations one has to admire Stanley’s foresight as well his audacity at the time.
Stanley’s impact on effective development policy, and on the way the Bank approaches policy in Africa is one reason he stands apart. But he wasn’t alone, of course; far from it. And I’m sure he would be offended if we didn’t take a moment to acknowledge—and applaud—everyone whose hard work equally influenced the evolution. People like Edward “Kim” Jaycox, who spent more than 30 years here, a dozen of them in charge of operations in Africa. Kim knew that an emphasis on policy adjustment and reform was good, but ownership and capacity, which he called the “missing link in African development,” should not be ignored. So he pushed to change that. He also pushed for coherence in donor assistance programs. Under Kim, the two African regions for the first time merged into one, a notable move away from colonial-era divisions and toward unified goals for Africa.
Or people like Callisto Madavo, who, after a brief twinning arrangement with Jean-Louise Sarbib, succeeded Kim as a vice president for the region and has the distinction of being the first African ever to hold that post at the Bank. When I started, it seemed like wishful thinking to have a VP for Africa who was actually African. Callisto broke new ground, and since then, all of the Bank’s regional vice presidents in Africa have been Africans. Our good friend Makhtar Diop carries that tradition forward, and we all wish him continuing success.
Over the past several decades, in response to a rapidly shifting landscape, the Bank has continued to broaden its approach to Africa. Following criticism of structural adjustment, the Bank increasingly focused on challenges in the social sectors, such as health and education reforms. In the 1990s, Poverty Reduction Strategy Papers placed renewed emphasis on social expenditures and market institutions. In recent years, as the ownership agenda has taken root, a focus on strengthening governance and anticorruption measures has become integral to the Bank’s work.
Stanley retired before many of these operational shifts went into effect, but he continued to research and advise from afar, so he still witnessed their positive impacts. He wrote that his career at the Bank was “tailor-made” for him because he believed the career objective of being an economist was to reduce poverty and deprivation in the world. He certainly did his part.
Celebrating African Progress
While Stanley’s influence at the Bank was far-reaching, his legacy, as I’ve described, is deepest in Africa. That’s why it’s fitting on this occasion to celebrate the significant progress in Africa, and to consider the equally significant challenges ahead, and how to tackle them.
The progress we’ve seen…
Many times over the years, I’ve likened the first four decades of Africa’s post-colonial development to the classic movie, “The Good, the Bad, and the Ugly.” The years after independence were good, with healthy economic and industrial growth and decent levels of investment and domestic savings. But the bad came after the good, and before long, the bad turned downright ugly. We all know the problems coming out of the 1970s, but after the continent’s nadir in the early 1980s, when per capita growth had bottomed out, we began to see a shift. Hope replaced despair.
By the mid-1990s, we saw a number of factors emerge that helped jumpstart the turnaround, beginning with a commitment to better policy structures but also including democratically elected leaders, improved governance, stronger economic management, debt relief, and more effective donor partnerships. The list goes on.
In recent years, hope for a turnaround has given way to expectations of something far greater—lasting change, bolstered by efforts to transform economies, not simply grow them. We’re now in a period of renewed optimism, bolstered by booming growth, but tempered by pragmatic realism. Africa has much more to offer, as long the right steps are taken.
Still, the recent gains cannot be ignored.
The size of the African economy has more than doubled since 2000, the beginning of a decade in which six of the world’s 10 fastest growing countries were African. In that time, several others were above or near the 7 percent threshold for economic takeoff, raising expectations for the future. According to IMF projections for the top 10 growing economies through 2015, seven are again in Africa.
It seems that every month brings a new report about the surge in investor interest in Africa. According to one of the most recent, Ernst and Young’s third Africa Attractiveness Survey, 86 percent of global business leaders with an established presence on the continent believe that Africa’s appeal will keep growing. Those surveyed rank Africa as the second most attractive regional investment destination in the world, behind Asia. The continent’s global share of foreign direct investment increased from 3.2 percent in 2007 to 5.6 percent in 2012, despite the economic downturn that began in 2008. The flow of private capital now exceeds foreign aid.
As Africa’s economic and social prospects have brightened, so has its defining narrative, shifting from a region wracked by war and poverty to one brimming with opportunity and potential, from the hopeless to a hopeful continent.
This is all fantastic news, but even as we celebrate it, we can’t get lost in it. It’s clear that after years of missteps and false starts, Africa is on the right track. But it’s also clear that Africa’s challenges have not gone away. They still exist, in some cases triggered by the accelerated growth we’ve welcomed.
The challenges ahead…
Africa continues to face persistent, structural development hurdles. It continues to lag behind the rest of the world in most economic indicators. So, the overriding question about Africa’s outlook is how to build on the successes so far; how to consolidate the economic gains into something greater?
The recent report of the High–Level Panel of Eminent Persons on the Post-2015 Development Agenda calls for a paradigm shift, a profound structural transformation to overcome obstacles to sustained prosperity. For our discussion today, I would like to mention the big transformative shifts that are, in my view, required for Africa to ensure that continuing growth is sustainable—economically, socially, and environmentally.
First is the lack of economic diversification. In almost all countries, production is dominated by the primary sector, either in agriculture or in minerals. Manufacturing sectors that are internationally competitive barely exist. As a result, productivity remains low, wages remain stagnant, and a majority of economies remain dangerously vulnerable to external shocks and the whims of private capital.
Second is rising inequality amid non-inclusive growth. Africa’s boom is creating disturbing income gaps that will undermine long-term efforts to reduce poverty. A report released earlier this month by JICA at the Fifth Tokyo Conference on African Development (TICAD V) in Yokohama echoed this theme, noting that not only has inequality been high, but it’s been increasing over time. During the 2000s, two-thirds of African countries had a Gini coefficient above 40, the threshold for high inequality.
Third is rapid urbanization and its impact on physical and social infrastructure. Over the last two decades, Africa has experienced the highest urban growth in the developing world. In the long run, increased urbanization is good, because cities fuel innovation and foster social mobility. But cities must be livable. Cracks in the social infrastructure, exacerbated by the rising inequality I just mentioned, are already showing as slums and urban poverty proliferate.
Fourth is unemployment. Population and economies may be growing, but jobs are not. And that’s a severe problem, especially among African youth. Approximately 10–12 million young people enter the labor market annually, and nearly all of them, even the well-educated, struggle with joblessness or in jobs that are insecure and pay low wages. In addition, millions of Africans lack the skills required for productive sectors, leading to an inefficient and underused labor force.
And fifth is Africa’s adverse climate. Countries must continually cope, adapt, and build resilience to the devastating impact of natural disasters and climate change. It’s encouraging that in Yokohama the UN and the World Bank jointly reiterated the importance of integrating these considerations into development policy and programs.
These challenges are immense, but they’re not insurmountable. That we’re even concerned about a “next wave” of development problems speaks to how far we’ve come. That’s why Africa’s economic transformation, not just its growth, is so critical. Transformation won’t solve all of Africa’s most pressing problems, but it’s a necessary condition to start.
For me, economic transformation is also a personal story. A few years ago, following my 10-year stint as the Executive Secretary of the UN Economic Commission for Africa in Addis Ababa, I founded the African Center for Economic Transformation, based in Accra, to help countries take that next step. At ACET, we assist governments in implementing the right policies and creating the right environment to spur sustainable development in the interest of long-term, structural transformation.
This fall, we will launch our flagship publication, the African Transformation Report, with events in Johannesburg, Addis Ababa, London, and here at the World Bank on the margins of the Annual Meeting. The report provides data and analysis for policymakers and the private sector to spur economic transformation. It will also introduce the African Transformation Index to show how countries are transforming over time and where they stand against each other on measures of five attributes of transformation: diversification, export competitiveness, productivity, technology, and human well-being.
Copies of a preview to the report are at the back of the room. They give a sense of the structure and contents of the full report. I urge those interested to pick one up.
Transformation will have implications for leadership, as well.
At a seminar in conjunction with the recently concluded African Development Bank meeting in Marrakech, a distinguished panel of political leaders, businessmen, and policymakers debated the type of leadership Africa needs if the continent is to attain structural transformation in the face of its major challenges. Their conclusion was that African leaders must combine technical competence, personal integrity, and a commitment to the well-being of the African people above all else.
A key test for Africa’s collective leadership is demonstrating the political will to accelerate economic integration and join the ranks of emerging economies by adding value to natural resources and increasing trade among African countries. That has been the goal since the inception of the Organization for African Unity in 1963, and it will be at the core of the African Union’s Vision 2063, to be set next January. I am sure Amina will have a lot to say on this in the panel discussion to follow shortly.
We should also expect this leadership to propel a transformative shift in Africa’s relations with its development partners and its place in the international economy. Profound changes are altering the global finance system. Investment flows, trade patterns, and the aid architecture are evolving, while the value of South-South cooperation and the influence of the BRICS are rising. These changes demand adroitness on the part of African governments to maximize the quality and quantity of external resources for their continent’s transformation.
In particular, the World Bank’s relations with Africa should continue to evolve, drawing on the institution’s past successes and failures, cognizant of the growing confidence and dynamism among the African people and their governments, and aware of the considerable vulnerabilities that still plague the continent.
Let me conclude this discussion of a vision for Africa’s future with two queries: If economic transformation is truly realized, where will Africa be in another 25 years? What kind of life will the next generation have? These are the questions many of us are working to answer right now.
And they are questions that I think Stanley would be… pleased … that we’re asking.
Stanley most likely would scoff at an event like this in his name, but he would surely welcome the discussion. I think he would be proud to see the broad extent of his influence on future generations. And that’s the final thing we should celebrate before concluding here today—Stanley’s continuing legacy, not just as an economist or researcher but as a leader, and as a friend. He personified the dedication and the passion for development that we should all hope to have. And he did it with an unfailing sense of humanity.
He certainly influenced the course of my career and life, and though I’ve been the one up here talking, I’m also just one of many, a single representative of the people Stanley inspired or motivated. I’ve shared my thoughts; so I felt it would be fitting to hear from a few others, including some of those who helped organize this tribute.
Martin Wolf, who’s chairing our upcoming panel, was a Stanley protégé when he joined the Bank in 1971. After a few years, he moved on to journalism, and he’s now a celebrated economics commentator at the Financial Times. Martin told me that Stanley made an “unforgettable impression” on him, due to an “extraordinarily rare” set of characteristics. His enthusiasm. His willingness to welcome subordinates whom he believed to be brighter and better trained than he was. His modesty about his own intellect.
“Initially,” Martin said, “Stanley regarded my decision to become a journalist as surprising and rather disappointing, perhaps even frivolous. I hope he changed his mind later on, because Stanley always stood for important ideas about the world. And he strengthened my view that getting ideas right mattered.”
Like Martin, Shankar Acharya also joined the Bank in 1971, and he too became one of Stanley’s protégés. Eventually, he returned to his native India, where he took on a prominent role as the chief economic adviser to the Indian government during the 1990s, a period of impressive economic growth for the country.
“Stanley Please was the best boss I ever had,” Shankar said. “His warmth, humor, and camaraderie, and his devotion to high standards, set him apart as leader and as a mentor. Over time, my mentor morphed into my good friend. His hearty laugh echoes in my mind.”
Not all of Stanley’s protégés dispersed around the world, of course. Jim Adams, a YP contemporary and good buddy of mine, first cut his teeth on Stanley’s team, and he stayed on at the Bank. In fact, he stayed … and stayed … and stayed! Jim recently retired after almost 40 years. He became a vice president for central operational policy and later vice president for East Asia. Since he retired from the Bank, Jim has been going around calling himself Tanzania Jim. Why? Sure he loves the safari. But the real reason is that the many years he spent working on Africa were the most fulfilling of his outstanding career at the Bank.
In Jim’s words, “Stanley was a determined optimist about the Bank. I remember so clearly his view that if you as an individual felt something was important, you could get it done. This view was central to so many things I tried to do in the Bank. It is a key message to all Bank staff.”
We now know the secret to Jim’s success!
This month marks 50 years since Stanley joined the Bank, and we could talk at endless length about the policies, processes, and people that he influenced, but his greatest influence no doubt lives on with his family. He wrote that his autobiography, “The Making of a Meritocrat,” was intended not for a general audience but for members of subsequent generations of the family who he hoped may be interested “in the life of at least one of their ancestors.”
It’s an honor to have Brian and Moira and other members of the family with us today. We are proud to recognize your great ancestor and to celebrate his achievements.
Stanley retired as a fulltime Bank employee in September 1983, though he continued to consult, advise, and publish research for decades. But he fretted that one of the many “distressing aspects” of retiring from the Bank was that colleagues ask you to look backward, to reflect on what has changed and what lessons can be drawn over time.
“My instincts,” he wrote, “are always to look forward at emerging problems and challenges. But history is sometimes useful provided it does not become too antiquarian or nostalgic.” In any case, he added, “colleagues persist.”
Yes, Stanley, we do persist. And so do you, in much of what we do.