AfDB candidate Samuel Maimbo: ‘Backlash to consensus’ came from forgetting to put people first.

For Zambia’s candidate for the African Development Bank presidency, investing in proper debate is key for effective non-ideological policy.

It is hard to draw a straight line between the mid-1990s creation of the World Trade Organization – with its clear ‘Washington Consensus’ views over the primacy of free trade – and the populist moment now convulsing the planet. But, over coffee and green tea at the Four Seasons in Dar es Salaam, the Zambian economist Samuel Maimbo gamely takes on the line of questioning.

The answers matter because Maimbo is running for the presidency of the African Development Bank on 29 May. He has spent his career in the biggest multilateral institution of all, the World Bank, where he oversaw the successful $93bn replenishment of IDA, the wing of the Bank that lends to the poorest countries. How can the international organisations of the future be more switched on, politically? Assuming, of course, that the very concept of global frameworks survives the Trump era.

“I believe strongly that in a multipolar world not only is the basic human element core for everybody involved in development,” says Maimbo. “But even more important is making sure the person who is ultimately at the driving wheel is as local to that community as you possibly can be. It is not about multinational institutions and what they want, it is about governments and what they are asking for on behalf of their people.”

Might it be possible that the multilateral institutions that governed the last 30 years of globalisation forgot that local politics mattered? Maimbo does agree that there has been a historical “consensus about what development should look like, and there was a huge backlash to it because we forgot whose agenda this was for”. Round one to the populists, perhaps?

But, he pushes back, there are no ‘dimly lit backrooms’ where these policies were cooked up – the World Bank is full of ‘people debating, people learning’, and when there is a problem there is course correction. “To give an example, there was a time when ‘state-owned enterprise’ was a bad word, if you found one you privatised it,” says Maimbo.

“There is a much more practical consensus today that it’s not the ownership that people are worried about, but the quality of service.”

Why intellectual punch-ups matter

This ‘course correction after debate’ over the state’s role in the economy is diplomatic but does ring true. When Chinese economist Justin Lin served as chief economist at the World Bank from 2008 to 2012, he told The Africa Report about the bitter fights he would have with his deputies, none of whom agreed with his pro-industrial policy stance.

Africa Insights

receive offers from The Africa Report's partners

“One thing that is exciting about working at the Bank is the friction that exists throughout the day,” agrees Maimbo, who believes this kind of intellectual contest is the heart of getting development right. “Every single project is peer-reviewed, and I loved attending these peer review sessions because you have these intellectual giants debating policy, with strong views.”

“Should I be successful in running for the African Development Bank, I want to create this culture of debate – innovation comes from it,” says Maimbo. “You have to argue your position, you do that by looking at your data, bringing value to your economies as close to home as possible, and agreeing on a development path that you can be consistent with over time. That’s the role of multilateral institutions – not telling you the solutions, but asking how you have understood the problem.”

Previous presidents of the African Development Bank have also seen the importance of fostering genuine debate. Donald Kaberuka, the Rwandan finance minister, was AfDB president between 2005 and 2010 and created the chief economist’s office at the AfDB. Previously, the institution was a tributary of economic thinking from Washington institutions.

While the AfDB chief economist’s office has been quiet in recent years, Maimbo thinks it could lead the debate, and he wants to tie in the “network of really good economic think tanks we have on the continent”. He points to the recently concluded Mission 300 Africa Energy Summit in Dar es Salaam as a good model; crowding in not just public officials, but financiers, businesspeople and thought leaders.

The health sector is one area where Africa could do better in domesticating knowledge, says Maimbo. “Think about clinical trials – they take a lot of time, but a very small percentage take place on this continent.” Getting more of them would sustain academic institutions and facilitate additional research.

Limits of industrial policy

While Maimbo was sanguine about the debates over the role of a state-owned enterprises, how much further down the ‘heterodox’ economic path is he comfortable treading? Would he go as far as South Korea and Japan did in helping domestic export industries deal with global competition by giving smart subsidies?

In short – not really. He frowns upon the strong state approach of General Park, the South Korean leader who briefly threw entrepreneurs into jail before partnering with them to develop the economy. Maimbo prefers the emphasis to be on the role of the government in connecting with neighbouring economies rather than guiding domestic actors. “That’s the job of every government, to open the markets.” Beyond that, it ought to ensure human capital is ready to work in those markets.

But some things do deliver results, says Maimbo, citing the progress made in Morocco’s auto sector as a good example – just don’t call it industrial policy, but rather, ‘adding value’. “Often the ingredients for growth are lying in plain sight,” he says. “The four basic ingredients don’t matter if you are in Japan or Africa.”

The first is policy consistency. Morocco’s car makers knew that when there was a policy shift – like the 60% local content push – it was going to stay for decades, “and that reassures people when you are making major manufacturing investments for your engine blocks”, he says.

The second basic ingredient is institutions. “Are there institutions around currency predictability? In the event of a dispute, do you have assurance you can get redress?”

The third is partnerships and wider societal trust – between the public and private sectors, for example, the government of Morocco and car makers in Europe, but also customers, and everyone on the value chain. “How strong are those bonds?”

The fourth is people. “What’s your pipeline for your artisans and technicians?” Maimbo asks. In the case of Morocco, the government built a special auto skills institute, to Renault specifications. “You can go back in history, and you will find that those countries that had the most significant rise said education is key,” says Maimbo, citing Singapore, Japan and Germany.

Private sector profits vs politics

While Maimbo does believe in the power of government to effect change, he also wants to protect the space of the private sector to extract profit even though the short-term benefits may not be apparent because it is not their profits that will benefit the country in the long run. “It’s what they are building behind; the jobs they are creating and the markets they are opening up.”

“If I had a large enterprise going to Zambia today, extracting 100% of its profits, creating 10,000 jobs, and creating infrastructure that allows other businesses to come in, then you are on a winning path,” says Maimbo. “The challenge we face is the patience to see the investment come in and not extract any rent upfront.”

Political grand bargains

For Maimbo, this is the true development path, and “it is not easy by any means, because it takes time, and you don’t get the political value immediately”.

The way to do this, believes Maimbo, is a ‘grand bargain’ between government and opposition. Just as things like plugs are standardised in the private sector, there need to be areas in the political sphere that should not be competed over – health and education should be taken off the table, for example.

“Somehow we take all these fabulous policies on growth that work for firms, and neglect them when it comes to countries,” says Maimbo. “It’s the same thing – it’s about the consensus on the things we shouldn’t compete on, identifying areas we can add value, different countries, different value addition, but all of us trading with each other.”

This hankering after a grand bargain takes us back to the sharply political, deal-making present. Does he think he is a good politician? “I’m learning!” says Maimbo. “One thing I have come to realise is that development is politics.”

Certainly, development finance is political. South Africa, which is perhaps ideologically more averse to the World Bank, has broken protocol and is fielding its candidate, rather than rallying behind Maimbo. As Maimbo enters the final months of the race for the African Development Bank presidency, we are about to discover how good a politician he is.