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Note: This document is from the archive of the Africa Policy E-Journal, published
by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action
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Africa: US/Africa Economic Policy
Any links to other sites in this file from 1996 are not clickable,
given the difficulty in maintaining up-to-date links in old files.
However, we hope they may still provide leads for your research.
Africa: US/Africa Economic Policy
Date Distributed (ymd): 960414
On February 1, 1996, the Office of the United States Trade
Representative released a Comprehensive Trade and Development
Policy for the Countries of Africa, in compliance with a 1994
Congressional mandate. Excerpts from this document were
distributed on February 24 via our Africa Policy Electronic
Distribution List, along with instructions for obtaining the
complete text at the US Trade Representative's Web site:
http://www.ustr.gov/reports/africa/
The Trade Representative's report constitutes a set of policy
proposals which are to be reviewed and amended by Congress on
an annual basis. Members of Congress have formed a bipartisan
Congressional Caucus on Trade and Investment in Africa to
undertake such a review. In response to an invitation by the
Caucus to submit responses to the report, the Washington
Office on Africa, on behalf of 18 organizational signatories,
sent the following letter to the Caucus leaders,
representatives Philip Crane (R-IL), Benjamin Gilman (R-NY),
Jim McDermott (D-WA) and Charles Rangel (D-NY).
April 11, 1996
Dear Representatives Crane, Gilman, McDermott, and Rangel:
Thank you for your invitation to respond to the Comprehensive
Trade and Development Policy for the Countries of Africa,
released by the Office of the United States Trade
Representative on February 1, 1996. We applaud the formation
of a bipartisan Caucus on Trade and Investment in Africa and
appreciate the Caucus efforts to promote a thorough and
participatory discussion of these vital issues.
We congratulate the original authors and supporters of the
1994 legislation which gave rise to these policy proposals. We
concur in their assessment that a coherent and effective US
policy towards Africa must encompass a full range of
interlocking issues, including trade, development, and
investment.
We strongly support the continuing efforts of both Congress
and the Administration to formulate an integrated US-Africa
trade and development policy. Although we have strong
reservations about the current document, we believe that it
represents a valuable preliminary step toward the realization
of that goal.
In particular, we wish to affirm the document's emphasis on
the creation of permanent structures within the Executive
branch responsible for coordinating US-Africa trade and
development policy and overseeing its implementation. We
believe that this will help to raise the visibility of
US-Africa relations and encourage a thoughtful and systematic
approach to the expansion of US ties with the continent.
We also support the document's attention to facilitating
regional coordination in Africa. The proposed provisions
relating to the designation of groups of countries for
cumulation treatment under the terms of the GSP will create
new opportunities for African nations.
Several other strategies mentioned in the document are worthy
of further exploration. In particular, we would endorse the
development of creative and flexible sources of capital and
credit, geared to the needs of small producers, credit unions,
and cooperative associations. Similarly, we support proposals
designed to increase Africa's access to, familiarity with, and
use of electronic networks particularly where these seem
likely to create opportunities for grassroots community groups
and non-governmental organizations to participate more
effectively in defining development agendas.
While we see these as positive aspects of an emerging policy,
we believe that the current document ignores many aspects of
African realities and disregards well-grounded African
analyses of key issues. Instead, it adopts a "one-size-fits-all"
approach to development, the many flaws of which have been
repeatedly identified by critics in Africa and around the world.
If we are serious about formulating a comprehensive US trade
and development strategy that is capable of narrowing the
economic gulf between (and within) the US and Africa,
establishing a foundation for sustainable development, and
addressing our mutual needs for security and prosperity then
we must radically revise our policy priorities. We therefore
propose that this process recognize the following general
principles:
1. Trade programs, debt reduction, aid, and other economic
cooperation initiatives should be conditioned on transparent
standards applied to recipient governments. But such
conditionalities should be developed in open debate, rather
than being imposed by donors according to a set of rigid
economic prescriptions.
A strategic approach to African development requires explicit
discussion of the combined impact of aid, trade, debt, and
different structural adjustment policies. The US can most
usefully shape its own policies on these complex and related
topics only if it is willing to engage in genuine dialogue on
these issues within African and multilateral contexts. This
should include not only the clubs of Western donors that
coordinate policy towards particular African countries, but
also a broad range of scholars and representatives of civil
society.
The US Trade Representative's policy proposals are premised on
the assumption that statist economic regimes are primarily
responsible for a failure to deliver sustained increases in
prosperity for the peoples of Africa. The policy points with
approval to the rapid growth achieved by many Asian economies
over the past three decades without acknowledging the central
role which the governments of these countries played in
orchestrating the development process, protecting growth
industries, and ensuring social investment in education and
agriculture. At the same time, the document presents an
unambiguously favorable depiction of structural adjustment
policies, ignoring the very grave objections which have been
raised by African analysts and which are receiving
increasingly serious consideration within the World Bank. As
a result, the policy states flatly, "A successful development
strategy must be trade-led and market-oriented."
In fact, the experience of most African countries demonstrates
that this rigid formula has been equally unsuccessful in
generating "sustained increases in prosperity" for Africa's
poorest households. Unregulated markets hold few rewards for
those who approach them with little or no economic clout.
Nevertheless, the dominant policy-making trend of the past
decade has been to demand that more and more economic
relationships be governed by the market. This model has
obstructed the efforts of African leaders, United Nations
agencies, and many non-governmental organizations to identify
and to implement programs more consistent with "sustainable
development."
Ultimately, public sector vs. private sector debates obscure
much more important questions: questions about what policy
choices are being made, about how the fruits of growth and
development are distributed within a society, and about the
extent to which policy-makers are accountable to the people
whose lives they affect. Similarly, a narrow focus on
macroeconomic indicators (such as aggregate economic growth)
disguises more localized, but equally important, dynamics
(such as the differential impact of development across gender,
class, ethnicity, etc.).
US policy should not aim to impose market-oriented solutions
on Africa, especially when these involve efforts to constrain,
indiscriminately, the role of government. Instead, US trade
and development strategies should be components of a broader
policy agenda which recognizes a useful and legitimate
regulatory role for government, promotes the public
accountability of government officials, encourages greater
incentive-orientation in all economic relationships, and
facilitates the efforts of African public, private, and
voluntary sector organizations to identify and implement new
economic initiatives suited to local needs and conditions.
Access to US development assistance and preferential trade and
investment programs should be conditional not merely on the
beneficiary's adoption of sound and appropriate economic
policies, but also on a demonstrated commitment to sustained
social investment, to principles of open and democratic
administration, and to the full recognition of basic human
rights (including, in particular, the rights of women, youth,
landless households, and other historically marginalized
groups).
2. Any comprehensive policy must address Africa's enormous
debt burden.
The current proposals only mention Africa's debt burden in
passing. They include no substantive recommendations for a
systematic program of debt reduction. Sub-Saharan Africa's
debt grew from $84 billion in 1980 to $223 billion by the end
of 1995. Twenty-eight sub-Saharan countries have amassed debts
which total more than twice their annual income from the
export of goods and services. Partly in the interests of
enhancing the ability of these nations to service their
onerous debts, G-7 nations and Bretton Woods Institutions have
promoted export-led growth. As a result, sub-Saharan
economies have made little progress toward self-sufficiency
while periodic over-production has weakened commodity prices
and diminished the purchasing power of their exports.
Overwhelming debt service obligations prevent most African
countries from embarking on any integrated and effective
development plan. US policy must acknowledge this situation
and address it through the introduction of systematic measures
to reduce Africa's bilateral and multilateral debt. Africa's
bilateral debt to the US is less than 3 percent of its overall
debt burden. But the US can and should press for revision of
the so-called "Naples Terms" that currently govern bilateral
debt restructuring. These terms are inadequate in addressing
Africa's enormous bilateral debt, primarily to European
governments. For example, Uganda was granted only 2 percent
reduction of its $3 billion debt under the Naples terms,
despite its strong compliance with economic adjustment
programs.
In addition, the US should vigorously support efforts for a
comprehensive approach to Africa's debt to multilateral
institutions. Any solution should provide additional funding,
rather than divert scarce resources from development aid, and
should give priority to countries committed to poverty
reduction.
3. A top priority for US trade policy should be the
establishment of fair trading terms. Congress is right to
recognize trade's potential as a tool for the promotion of
economic growth and development, both in the US and in Africa.
In order for it to fulfil that potential, however, US policy
must do more than simply expand US exports to Africa. Trade
growth will only be sustainable if it is bidirectional and if
it meets the needs of both partners. Fair terms of trade are
a prerequisite for such durable partnerships.
The provisions of the GATT treaty, which govern international
trade, generally favor industrialized nations. Most African
countries have less capacity to take advantage of the new
trade opportunities expected to flow from the Uruguay Round
agreements. The US should enter into a regular dialogue with
a broad cross-section of Africans in order to define more
equitable trade terms and to work for their eventual
incorporation into existing agreements. In the interim, the US
should endeavor to minimize GATT's negative impact on African
trading partners by making full use of provisions designed to
assist developing countries (such as the Generalized System of
Preferences). It should also increase its technical assistance
programs to facilitate regional integration and economic
diversification.
4. Development assistance should continue for the foreseeable
future. Carefully targeted development assistance can
complement trade and investment growth to accelerate economic
transformation. Moreover, the US must share responsibility for
Africa s problems. Many of Africa's present problems are
directly attributable to the Cold War which made countless
African nations battlegrounds for US-Soviet competition and to
the continent's long and negative experience of precolonial
and colonial engagement by Western powers. The US should be as
active in addressing the consequences of these struggles as it
was in perpetuating them.
At the same time, the US must radically reassess its
assistance strategies and priorities. We cannot afford to
squander funds in the pursuit of short-term economic
objectives, on well- intentioned projects which are peripheral
to the needs and interests of their ostensible beneficiaries,
or on the cultivation of fragile alliances with governments
which do not enjoy the support of their citizens. US
assistance must be aid that works. It must advance America's
interests in long-term peace and security by promoting
sustainable and equitable development. African assistance
programs should emphasize investment in both physical
infrastructure and in human resources. Social investment is
especially important, not only because it puts people at the
center of the development process, but also because it
enhances the potential for rapid and equitable economic
growth.
Focused efforts to prevent humanitarian crises are also
priority assistance investments, given their potential to
avoid more costly crisis-relief expenditures later. And
humanitarian aid needs to be rethought so that it lays the
groundwork for long-term development rather than only
addressing immediate disasters.
In conjunction with the reorientation of its funding
priorities and the other initiatives discussed above, the US
should renew its commitment both to bilateral aid programs and
to multilateral institutions, including UN agencies and the
IDA facility of the World Bank. US assistance programs should
achieve a rough balance in their support for public, private,
and voluntary sector initiatives. US aid could be particularly
valuable in encouraging national and regional dialogues on
trade and private sector development by engaging a cross
section of the society (men and women; rural and urban;
employed, self-employed, unemployed, and under-employed;
public, private, informal, and voluntary sectors; etc.) in
discussions related to these topics.
Finally, we recognize that this is an evolving policy which is
scheduled to be reviewed annually over the next four years. We
welcome the opportunity to be involved in this process on an
ongoing basis. We also encourage the Caucus to seek out a
variety of African perspectives and advice as frequently as
possible.
Sincerely,
American Committee on Africa
Jennifer Davis, Director
Bread for the World
David Beckmann, President
Constituency for Africa
Mel Foote, Executive Director
Evangelical Lutheran Church in America, Lutheran Office for
Governmental Affairs
Mark Brown, Assistant Director for Advocacy
Global Ministries of the United Church of Christ and the
Disciples of Christ, Africa Office
Rev. Dan C. Hoffman, Area Executive, and Mr. Erich
Mathias, Program Associate
Inter-Church Coalition on Africa, Economic Justice Programme
John Mihevc, Programme Officer
Maryknoll Justice and Peace Office
Terence W. Miller, Director
Mennonite Central Committee
Jim Shenk and Eric Olfert, Co-Secretaries for Africa
National Council of Churches, Africa Office
Willis Logan, Director
Presbyterian Church (USA)
Rev. Jon T. Chapman, Area Coordinator for Southern Africa
Presbyterian Church (USA), Washington Office
Elenora Giddings Ivory, Director
Progressive National Baptist Convention, Home Mission Board
Rev. Archie LeMone, Executive Director
Society of African Missions
Stephen G. Price, Office of Justice and Peace
Society of Missionaries of Africa
William C. Dyer, Justice and Peace Officer
United Church of Christ, Office for Church in Society
Rev. Jay Lintner, Director, Washington Office
United Methodist Church, Africa Office
Doreen Tilghman, Assistant General Secretary
United Methodist Church, Women's Division
Anna Rhee, Executive Secretary for Public Policy
Washington Office on Africa
Rev. Dan C. Hoffman, Chair, Board of Directors
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This material is produced and distributed by the Washington
Office on Africa (WOA), a not-for-profit church, trade union
and civil rights group supported organization that works with
Congress on Africa-related legislation. WOA's educational
affiliate is the Africa Policy Information Center (APIC).
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