‘Channels exist for oil wealth to reach us all’


20-March-2013

Mr Devarajan giving his lectureWe had asked him to compare our situation with those of many African countries which he, on Monday, said lack the necessary structures and are therefore poor with low human development index figures despite being major oil producers.

He was talking about the sustainability of Africa’s growth in a lecture he gave at the International Conference Centre.

“Your situation will be different also because you are discovering oil 30 years after independence and you have had time to develop these institutions. There is a better chance that oil wealth will be more widely shared among the population, the way you are sharing the revenue from tourism and fisheries,” he said.

“You can see the social indicators for Seychelles are very high, for example in education and health. Much higher than those of the oil exporters I was talking about and that’s a good sign.”
He warned, however, that although our health system is well developed to give primary health care, Seychelles now increasingly has to deal with non-communicable ‘diseases of development’ which we are not as well prepared for.

He said even the education system needs to evolve to catch up with the times.
In the well-attended lecture, Mr Devarajan said African nations are growing much faster than most other countries, but national assets hardly benefit the people who need help most.

He showed graphs indicating that between 1% and 60% of the money directed towards health care clients in some countries reaches clients in the form of intended services
“Despite global economic turmoil, Africa was projected to grow by 4.8% in 2012, broadly unchanged from the 4.9% growth rate of 2011. Excluding South Africa, growth is forecast at 6 percent, making it one of the fastest growing regions of the world. Indeed, a third of countries in the region will be growing at or above 6%.

“Thanks to this growth, the poverty rate has been falling faster than 1% point a year; and for the first time, the absolute number of people living on $1.25 a day fell by 9 million between 2005 and 2008.

Thirty four African countries saw a lowering of their income poverty rate between 1999 and 2008. “Countries with the largest percentage point decline in poverty are: Cameroon, Chad, Ethiopia, Mali, Niger and Sierra Leone. But not all countries saw an improvement in poverty reduction: Seven countries had higher poverty rates in 2008 compared to 1999; five are fragile states,” he said.

“Child mortality has also been declining in a dozen countries at a rate faster than is required to meet the Millennium Development Goals (MDGs).  The problem is that it started declining only recently.  Even though a large number of African countries are unlikely to meet the MDGs, about half the “off-track” countries are within 11 percent of the trajectory to reach the goals.
Naming a country whose statistics showed school children are taught for only two hours, Mr Devarajan said:

“This is not so surprising when you realise that 23% of the time the teacher is not there.  Furthermore, the teachers’ knowledge of language is extremely poor.”
Introducing him the Minister for Finance, Trade and Investment Pierre Laporte said sound economic policies can make a difference in development.

“Development activities in the Africa region have been strongly supported by policies and commodity prices which have been very strong.

“Policy makers need to be particularly concerned that growth translates into growth in human welfare and the benefits of development accrue more evenly and the issues of sustainable development are effectively addressed.

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