For Africa, Trade and Aid
By Roger Wilkins and William Jackson
This is not only bad for Africa; it's bad for the United States. At a time when the health of the U.S. economy is more tied to foreign markets than ever before, it would be shortsighted not to find ways to remove obstacles that limit African participation in the increasingly competitive global market.
The African Growth and Opportunity Act, which the House has passed and the Senate is now debating, is an important step in the right direction. It would permit greater U.S. market access for African-produced goods, promote needed economic and political reform, and spark increased U.S. private investment on the continent.
Passage of this modest bill would mark a welcome change in the U.S. approach to African countries, which up to now have been treated more as supplicants than as bona fide trading partners.
But while the bill is necessary, it is not sufficient. A recent study by the Africa-America Institute suggests that the Africa trade bill will not significantly strengthen African economic competitiveness unless action is also taken on two other fronts: debt relief and human resource development.
The heavy debt burden carried by most African countries is a major impediment to economic development. A country such as Ghana, considered one of the most promising economic performers on the continent, simply cannot make the necessary capital investments in people and infrastructure so long as it must pay nearly a third of its export earnings just to service its external debt.
While the Africa bill does not address the debt dilemma directly, other bills now before Congress, notably the bipartisan "Debt Relief for Poverty Reduction Act," would substantially increase U.S. efforts to reduce Africa's external debt.
To its credit, the Clinton administration has also stepped up to the plate by requesting an additional $850 million to fund the Cologne Initiative on debt relief.
Some supporters of the Africa bill have sought to win support for it by chanting the mantra "Trade, not Aid." They have it half right: African countries are unlikely to progress economically without expanded trade. But to suggest that trade is a ready and easy substitute for aid is both glib and wrong.
Far from being the polar opposite of trade, well-targeted foreign assistance should be viewed as an indispensable tool for improving the trade and investment environment in Africa. African countries will not be able to exploit new trade opportunities without significant investments in education and training, especially job skills, business education and technical/professional training.
As a world leader in higher education and professional skills development, the United States has much to offer Africa in these areas.
Africans are ready to compete. In recent years, most African countries have embraced the open market, implemented democratic reforms and welcomed new foreign investment. These efforts deserve U.S. support.
Roger Wilkins is chairman of the board of trustees at the Africa-America Institute. William Jackson is the institute's director of government relations and policy.
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