African nations must stop seeking handouts and begin tough structural reforms, particularly in the area of trade, if they truly want to improve their economies, US Secretary of State Hillary Clinton said on Monday.
“Most of the work that needs to be done needs to be done in Africa,” Clinton told a forum about US diplomacy on the continent.
“If you look at trade between African countries, it is abysmally minimalistic,” Clinton said. “African countries don’t trade with themselves. They have barriers and tariffs and customs problems that stand in the way of developing their own economies.”
Clinton’s sharp comments came in response to a question about broadening the African Growth and Opportunity Act (AGOA), a measure passed by Congress in 2000 which gives favourable access to US markets to dozens of African countries.
While many African governments hope the benefits can be made permanent, Clinton signalled that Washington is going to look for signs that African countries are serious about improving their own domestic economic policies.
“The United States will do our part, but African countries have to start doing their part and making the changes that will grow the economies in the sub-Saharan region,” she said.
“It means doing things that are going to run afoul of special interests and government bureaucrats and businesses that already have a lock on a market,” Clinton added.
“They’d rather have the biggest piece of a small pie than a smaller piece of a big pie. So if you are going to have that mentality, it is really hard to utilise the incredible tool that AGOA is.”
Both Clinton and US President Barack Obama have used trips to Africa to stress good governance, saying local leadership is as important as foreign help in the drive to eradicate war, corruption, and disease in Africa.
Although big improvements under AGOA have been made, overall US trade with sub-Saharan African countries remains small, accounting for just slightly more than 1 percent of total US exports and about 3 percent of total US imports in 2008.
US imports from sub-Saharan Africa grew about 28 percent in 2008 to US$86 billion, although higher oil prices accounted for a large chunk of that increase.
Sounding almost exasperated, Clinton indicated that Africa’s arguments for the redress of economic imbalances left by colonialism were beginning to wear a little thin – at least in Washington.
“For goodness sakes, this is the 21st century. We’ve got to get over what happened 50, 100, 200 years ago and let’s make money for everybody. That’s the best way to try to create some new energy and some new growth in Africa,” she said.
Andrew Quinn (Reuters, Washington)
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Showing posts with label africa. Show all posts
Showing posts with label africa. Show all posts
Friday, June 18, 2010
Tuesday, May 18, 2010
Rush reports to the district on his efforts to expand global energy and trade relations between the United States and the Gulf of Guinea
CHICAGO –– In a speech in Houston on Monday, U. S. Rep. Bobby L. Rush (D-IL) called on the U.S. Department of Energy and the U.S. Executive Directors of the World Bank and the African Development Bank to support the establishment of Clean Energy Research Centers and Clean Energy Equipment Financing Facilities for the Gulf of Guinea.
Rush, along with other Members of Congress who represent Houston, U. S. Rep. Sheila Jackson Lee and U. S. Rep. Al Green, jointly expressed their support for clean energy technology research and equipment exports during a congressional briefing held at the Greater Houston Partnership in collaboration with the Woodrow Wilson Center on the subject “The Impact of U.S. Energy Policy on Trade with the Gulf of Guinea.”
Houston and Chicago were recently selected as two of four American cities to participate in the World Bank Group’s Public Sector Liaison Officer Network, an organization comprised of 100 business intermediary organizations, in 80 countries, working to foster trade and investment between participating countries with the support of the World Bank Group’s products and services.
The World Bank estimates that over 150 billion cubic meters of natural gas are flared or vented annually, an amount worth approximately $30.6 billion. This volume is an amount that is equivalent to 25 percent of the United States’ gas consumption or 30 percent of the European Union’s gas consumption per year. This flaring is highly concentrated in 10 countries that, together, account for 75 percent of global emissions, with the largest flaring operations occurring in the Niger Delta region of Nigeria.
The U.S. currently imports approximately 15 percent of its oil and gas supplies from West African countries along the coast of the Gulf of Guinea. This level is expected to increase to 25% to 30% by 2020. The U.S. is also the largest importer of oil and gas from this region.
– more –
– 2 –
While the U.S. pursues an energy policy that seeks to decrease its dependence on foreign oil and decrease its contribution to global warming, it is essential that the U.S. provide support to these key strategic partners to help reduce carbon emissions and gas flaring associated with meeting our market needs while alternative sources of energy are scaled up.
The proposal seeks to replicate a $37 million Department of Energy grant to China for research centers that was matched by the grantees, resulting in $75 million in total U.S. research. Under the proposed U.S.–Gulf of Guinea Clean Energy Research Center project, the U.S. Department of Energy will provide grants to regional universities and technology centers, with matching funds from the grantee or the host country, and the African Development Bank. The research will focus on advancing technologies for building energy efficiency, carbon capture and storage, and clean energy/anti-flaring/pollution control, biomass and other alternative energy solutions.
The Members of Congress who participated in the forum have encouraged the Obama Administration to include this initiative in the U.S.-Nigeria as well as in the U.S.-Angola Bi-National Commission discussions.
Congressman Rush joined Chris Wilmot, Chairman of the Greater Houston Partnership’s World Bank Task Force, in calling on Robert Zoellick, President of the World Bank, to establish financing facilities for clean energy projects in the Gulf of Guinea that can be complimented with financing from OPIC, EXIM and the African Development Bank. These recommendations also encourage these financial institutions which receive U.S. government funding to include minority firms.
Congressman Rush also expressed his support for the establishment of the Gulf of Guinea Energy Fund. The emergence of this fund was in response to new, local content laws in the region and recommendations outlined in a 2005 Congressional Black Caucus Foundation Report that called for the establishment of new financing facilities and joint ventures between major oil companies and indigenous companies with a particular emphasis on including U.S., minority-owned firms.
The briefing was held on the first day of the Offshore Technology Conference, an event designed to engage leading government and industry representatives from Africa as well as senior executives from U.S. oil companies to help develop legislation supporting U.S. trade and energy policy toward the Gulf of Guinea region in West Africa.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Rush, along with other Members of Congress who represent Houston, U. S. Rep. Sheila Jackson Lee and U. S. Rep. Al Green, jointly expressed their support for clean energy technology research and equipment exports during a congressional briefing held at the Greater Houston Partnership in collaboration with the Woodrow Wilson Center on the subject “The Impact of U.S. Energy Policy on Trade with the Gulf of Guinea.”
Houston and Chicago were recently selected as two of four American cities to participate in the World Bank Group’s Public Sector Liaison Officer Network, an organization comprised of 100 business intermediary organizations, in 80 countries, working to foster trade and investment between participating countries with the support of the World Bank Group’s products and services.
The World Bank estimates that over 150 billion cubic meters of natural gas are flared or vented annually, an amount worth approximately $30.6 billion. This volume is an amount that is equivalent to 25 percent of the United States’ gas consumption or 30 percent of the European Union’s gas consumption per year. This flaring is highly concentrated in 10 countries that, together, account for 75 percent of global emissions, with the largest flaring operations occurring in the Niger Delta region of Nigeria.
The U.S. currently imports approximately 15 percent of its oil and gas supplies from West African countries along the coast of the Gulf of Guinea. This level is expected to increase to 25% to 30% by 2020. The U.S. is also the largest importer of oil and gas from this region.
– more –
– 2 –
While the U.S. pursues an energy policy that seeks to decrease its dependence on foreign oil and decrease its contribution to global warming, it is essential that the U.S. provide support to these key strategic partners to help reduce carbon emissions and gas flaring associated with meeting our market needs while alternative sources of energy are scaled up.
The proposal seeks to replicate a $37 million Department of Energy grant to China for research centers that was matched by the grantees, resulting in $75 million in total U.S. research. Under the proposed U.S.–Gulf of Guinea Clean Energy Research Center project, the U.S. Department of Energy will provide grants to regional universities and technology centers, with matching funds from the grantee or the host country, and the African Development Bank. The research will focus on advancing technologies for building energy efficiency, carbon capture and storage, and clean energy/anti-flaring/pollution control, biomass and other alternative energy solutions.
The Members of Congress who participated in the forum have encouraged the Obama Administration to include this initiative in the U.S.-Nigeria as well as in the U.S.-Angola Bi-National Commission discussions.
Congressman Rush joined Chris Wilmot, Chairman of the Greater Houston Partnership’s World Bank Task Force, in calling on Robert Zoellick, President of the World Bank, to establish financing facilities for clean energy projects in the Gulf of Guinea that can be complimented with financing from OPIC, EXIM and the African Development Bank. These recommendations also encourage these financial institutions which receive U.S. government funding to include minority firms.
Congressman Rush also expressed his support for the establishment of the Gulf of Guinea Energy Fund. The emergence of this fund was in response to new, local content laws in the region and recommendations outlined in a 2005 Congressional Black Caucus Foundation Report that called for the establishment of new financing facilities and joint ventures between major oil companies and indigenous companies with a particular emphasis on including U.S., minority-owned firms.
The briefing was held on the first day of the Offshore Technology Conference, an event designed to engage leading government and industry representatives from Africa as well as senior executives from U.S. oil companies to help develop legislation supporting U.S. trade and energy policy toward the Gulf of Guinea region in West Africa.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Friday, November 13, 2009
World Bank - Africa Needs U.S. $93 Billion For Infrastructure
Abuja — The World Bank said yesterday that the amount needed to fix infrastructure in Africa is twice what was previously estimated. It put the new figure at $93 billion half of which, it noted, should go into boosting power supply.
A joint study just released by the bank from Washington cited examples of infrastructural challenges in the continent. African consumers pay twice as much for basic services as people elsewhere in the world.
A monthly basket of prepaid mobile telephone services costs $12 in Africa but only $2 in South Asia.
Resource-rich countries like Nigeria and Zambia can manage funding gap of four percent of GDP. For much of the rest of the continent, the task ahead is daunting.
The poor state of infrastructure in Sub-Saharan Africa cuts back national economic growth by two percentage points every year. Bank study team which assessed the state of infrastructure in 24 countries across the continent also discovered that poor electricity, water, roads and information and communications technology (ICT) reduces productivity by as much as 40 percent.
A separate statement from the bank in Midrand, South Africa, said the study, is "one of the most detailed ever undertaken on the African continent." It was jointly conducted by the African Union Commission, African Development Bank, Development Bank of Southern Africa, Infrastructure Consortium for Africa, the New Partnership for Africa's Development, and the World Bank. Besides relevant ministries, the study surveyed 16 rail operators, 20 road entities, 30 power utilities, 30 ports, 60 airports, 80 water utilities, and over 100 ICT operators, as well as the relevant ministries in 24 countries.
Results were derived from detailed analysis of spending needs and fiscal costs as well as sector performance benchmarks.
In other words, the study relied on based on country-level microeconomic models and covered operational and financial aspects as well as the country's institutional framework.
"Modern infrastructure is the backbone of an economy and the lack of it inhibits economic growth," says Obiageli Ezekwesili, World Bank
Vice President for the Africa Region and former Nigerian minister, who spoke from South Africa. "This report shows that investing more funds without tackling inefficiencies would be like pouring water into a leaking bucket. Africa can plug those leaks through reforms and policy improvements which will serve as a signal to investors that Africa is ready for business."
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Saturday, July 4, 2009
Africa - U.S. Wants to Spotlight 'Successful Models' And Be An 'Effective Partner' - Obama
Barack Obama makes his first visit to sub-Saharan Africa as president of the United States next week, following a trip to Russia as well as to Italy, where he will participate in a meeting of industrialized nations known as the G8.
AllAfrica's Charles Cobb, Jr., Reed Kramer and Tami Hultman went to the White House to explore President Obama's views on Africa in advance of his visit. The interview took place in the Blue Room.Charles Cobb posed the questions.
We asked visitors to our site, allAfrica.com, what they might be interested in with respect to your policy. And as you might imagine, the responses are everywhere: conflict resolution, development issues, trade issues, et cetera. But they and we have one immediate question: How is it that you happened to pick Ghana as the first place to visit in sub-Saharan Africa?
Well, part of the reason is because Ghana has now undergone a couple of successful elections in which power was transferred peacefully, even a very close election. I think that the new president, President Mills, has shown himself committed to the rule of law, to the kinds of democratic commitments that ensure stability in a country. And I think that there is a direct correlation between governance and prosperity. Countries that are governed well, that are stable, where the leadership recognizes that they are accountable to the people and that institutions are stronger than any one person have a track record of producing results for the people. And we want to highlight that.
And I assume that you'd like to see a lot more 'Ghanas' in Africa. And part of your policy would be, I assume, to encourage that.
Absolutely.
How?
Well, part of it is lifting up successful models. And so, by traveling to Ghana, we hope to highlight the effective governance that they have in place.
I don't think that we can expect that every country is going to undergo these transitions in the same way at the same time. But we have seen progress in democracy and transparency and rule of law, in the protection of property rights, in anti-corruption efforts. We have seen progress over the last several years; in some cases, though, we're also seeing some backsliding. In my father's own country of Kenya, I'm concerned about how the political parties do not seem to be moving into a permanent reconciliation that would allow the country to move forward. And Kenya is not alone in some of the problems that we've seen of late, post-election or pre-election.
And we just want to make sure that people are mindful that this isn't just some abstract notion that we're trying to impose on Africa. There is a very practical, pragmatic consequence to political instability and corruption when it comes to whether people can feed their families, educate their children, and we think that Africa - the African continent is a place of extraordinary promise as well as challenges. We're not going to be able to fulfill those promises unless we see better governance.
Do you have priorities in terms of countries or regions? For instance, West Africa is extremely important in terms of oil; East Africa in terms of some of the strategic concerns of the United States?
I think the entire continent is important. And keep in mind that although I'm visiting Ghana on this particular trip, we've already had [Prime Minister] Tsvangirai of Zimbabwe in the Oval Office. We've had [President] Kikwete from Tanzania in my office. And in each case, I'm trying to send the same message. You've seen some very good work by the administration in Tanzania focusing on how to deliver concrete services to the people, and wherever folks want to help themselves, we want to be there as a partner. And I think that you've got some very strong leadership in Africa that is ready to move forward and we want to be there with them.
On the economic front, that means opening up better trade opportunities. It means that we are interested not just in foreign aid, but in how we strengthen the capacity for development internally in these countries, and we want to work in a multilateral context, as well as the bilateral strengthening of relations with many of these countries.
But as you point out, there are strategic, national security, economic, environmental reasons why we think this region is important. And part of the reason we wanted to - although we're only going to one country this time, I actually thought that it made sense for us to connect a trip to Ghana to a previous trip with the G8. We'll be meeting a number of African countries in Italy during the G8 meeting - before that, a meeting in Russia - to show that Africa is directly connected to our entire foreign policy approach; that it's not some isolated thing where once every term you go visit Africa for a while to check that box, but rather it's an ongoing part of a broader discussion about how we move many of these international challenges forward.
Development assistance will presumably be an important piece of your Africa policy. Now, development assistance is pretty fragmented, whether you look at the United States or you look at it globally, in the sense that varying countries have varying approaches. Now you, more than any President, are associated with using technological tools, and I can't help but wonder if you have thought about using technology to bring some coherence, if you will, like tracking how aid works or where it goes, et cetera.
Look, I think you make a very important point, and that is that even just within the U.S. government, our aid policies have been splintered among a variety of agencies, different theories embraced by different people depending on which administration, which party, is in power at any given time. Trying to create something steady and focused - and always basing our policies on what works and not on some ideological previous position is going to be very important.
And technology can play a very important role in streamlining our aid to countries, making sure that we're tracking how that aid is being applied, making sure that it's reaching the people it's intended to reach. One of the concerns that I have with our aid policy generally is that western consultants and administrative costs end up gobbling huge percentages of our aid overall. It seems to me that what we should be doing is trying to minimize our footprint and maximize the degree to which we're training people to do for themselves. So I think using the Internet, using software, using modern technology to improve delivery systems is important.
Now, I also think, on the ground, in many of these countries, how we think about not high-tech stuff but low-tech technologies to, for example, improve food production is vitally important. I'm still frustrated over the fact that the green revolution that we introduced into India in the '60s, we haven't yet introduced into Africa in 2009. In some countries, you've got declining agricultural productivity. That makes absolutely no sense. We don't need fancy computers to solve those problems; we need tried and true agricultural methods and technologies that are cheap and are efficient but could have a huge impact in terms of people's day-to-day well-being.
In addition, you mentioned a few minutes ago the importance of investment and not just aid. What's the balance between assistance and investment? Most businesses get a bigger return on their investment in Africa than any other part of the world. So should that receive more emphasis than it's been getting? What kind of balance in your mind exists in development assistance?
Well, a couple of points I would make. Number one, you're not going to get investment without good governance. So that's part of the reason why we emphasize it. Again, this is a very practical, hard-headed approach to how we're going to see improvements in the daily lives of the peoples of Africa. If government officials are asking for 10, 15, 25 percent off the top, businesses don't want to invest there. That's point number one.
Point number two, I think that when my father left Kenya and traveled to the United States back in the early '60s, the GDP of Kenya and South Korea weren't equivalent - Kenya's was actually higher. What's happened over that 50-year period? What you've seen is Korea combine foreign investment, integration with the global economy, with a strategic sense of certain industries that they can promote for export; great emphasis on education for a skilled workforce; insisting that foreign investment is accompanied by technology transferring so that homegrown industries can be built and nurtured.
So we've got models out there. We know what it might take. What we haven't seen is a consistent, steady application of some of these models over time in Africa, and I think that now is the time to start.
Is that a failure of U.S. policy or is that a failure of governance in Africa?
I would say that the international community has not always been as strategic as it should have been, but ultimately I'm a big believer that Africans are responsible for Africa.
I think part of what's hampered advancement in Africa is that for many years we've made excuses about corruption or poor governance; that this was somehow the consequence of neo-colonialism, or the West has been oppressive, or racism. I'm not a believer in excuses.
I'd say I'm probably as knowledgeable about African history as anybody who's occupied my office. And I can give you chapter and verse on why the colonial maps that were drawn helped to spur on conflict, and the terms of trade that were uneven emerging out of colonialism.
And yet the fact is we're in 2009. The West and the United States has not been responsible for what's happened to Zimbabwe's economy over the last 15 or 20 years. It hasn't been responsible for some of the disastrous policies that we've seen elsewhere in Africa. I think that it's very important for African leadership to take responsibility and be held accountable.
And I think the people of Africa understand that. The problem is that they just haven't always had the opportunities to organize and voice their opinions in ways that create better results.
In the last minute or so of our conversation, even though you are really barely into your presidency, I already feel compelled to ask you a legacy question. (Laughter.) And that is: What, when you finish your presidency, do you expect your stamp on Africa policy to be? What do you think that will be?
I would like, at the end of my term in office, to be able to say that the United States was an effective partner with countries throughout Africa in building the kinds of institutions, political, civil, economic, that allowed for improving standards of living and greater security for the people of Africa; that we moved them on a trajectory in which they are integrating with the global economy; and that a young person growing up in Johannesburg or Lagos or Nairobi or Djibouti can say to themselves: I can stay here in Africa, I can stay in my country and succeed, and through my success, my country and my people will get stronger.
That would be a good legacy. I don't expect that we're going to get there in four years or eight years, but I think we can get on that path. And the United States is a critical partner in that process.
I need another hour or so. (Laughter.) But I thank you for your time.
Thank you so much.
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Wednesday, July 1, 2009
Increased protectionism and the implication for developing countries
Since 1945 the world economy has shown high growth rates associated with the liberalization of goods and services and increased capital flows. However the current global financial crisis has raised concerns for many countries regarding present and potential losses that can be suffered in income and employment. The risk of protectionist policies has heightened as the financial crisis deepened and economic activity decreased with rising unemployment.
Since the start of the financial crisis the World Bank has estimated that 78 trade measures have been imposed or implemented. These trade measures include 66 trade restrictions of which 47 took effect. Several countries have raised border barriers, introduced subsidies or stimulus packages for export-orientated or import competing industries and increased the use of trade remedies. A pattern is beginning to emerge of an increase in import licensing, import tariffs and trade remedy utilization to support domestic industries.
Historical economic evidence also suggests a strong link between the increased use of import restrictive trade remedies such as anti-dumping measures and safeguards and an economic downturn associated with recessions. The Global Anti-dumping Database shows that the implementation of product level trade remedies increased by 34 percent in 2008 and in the first quarter of 2009 the utilization increased by 22.3 percent. The imposition of definitive measures in 2009 is projected to be 18.5 percent higher than in 2008.
A number of countries have implemented trade remedies, with South-South trade increasingly being affected by these measures. Developing countries have initiated 74 percent of trade remedy investigations in the period from the first quarter in 2008 to the same period in 2009 with the targeted exporters also primarily being located in other developing countries. However these inward-looking policies risk the retardation of market corrections, distorting trade and triggering retaliation by trade partners.
African countries have not played a major role in the current utilization of import restrictions even though some of these countries’ major trading partners have implemented different forms of import restrictions, investment and finance support and job protection measures. The increased implementation of protectionist policies by or against developing and least developing countries can jeopardise growth prospects and developmental goals, especially for African countries.
* Protectionism can lead to higher unemployment and prices with an increase in debt. Protectionist policies arguably lead to an increase in the cost of consumer goods and production inputs. Due to the protection of domestic industries, foreign competition is reduced which can have the undesired effect of inefficient domestic firms.
* Export subsidies are concentrated on few products, including dairy, beef and fruits and vegetables. These products can often be produced and exported more efficiently by developing countries. However an increase in export subsidies penalizes developing country producers which do not have access to subsidies and provide an incentive to over produce. This can lead to a surplus in the market leading to lower world prices and limiting the ability of developing countries to compete in local and export markets. African economies are dependant on agricultural exports thus an increase in subsidies can lead to a decrease in revenue and a deterioration of the trade balance for many African nations.
* If countries take advantage of the gap between applied and bound rates (water in the tariffs) the potential negative impact on world trade and welfare has been estimated at a decline of 7.7 percent in world trade and US $ 353 billion in world real income. The increase of tariffs on agricultural products will have a dramatic effect on exports and welfare for developing and least developed countries.
The World Trade Organisation (WTO) and the World Bank have indicated that the contribution of protectionist policies to the decline in trade has been limited to date, however looking forward there is a risk of a retreat from trade liberalization and open border policies which has been followed in the past decade. Although the level of trade affected by protectionist policies has thus far been small for most economies, these policies can have important welfare-distorting effects beyond the loss of imports and losses to domestic consumers.
As the financial crisis puts increase pressure on African economies the question remains whether governments will resist political pressure to utilize the implementation of protectionist measures to protect domestic industry and employment? South Africa has already indicated that they are considering raising import tariffs on garments to maximum levels agreed to by South Africa in the WTO. Is this an indication of policy measures to come by African countries as economic activity decrease due to the global recession?
Willemien Denner, a tralac Researcher, On increased protectionism and the implication for developing countries.
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=69150&cat_id=1059
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Since the start of the financial crisis the World Bank has estimated that 78 trade measures have been imposed or implemented. These trade measures include 66 trade restrictions of which 47 took effect. Several countries have raised border barriers, introduced subsidies or stimulus packages for export-orientated or import competing industries and increased the use of trade remedies. A pattern is beginning to emerge of an increase in import licensing, import tariffs and trade remedy utilization to support domestic industries.
Historical economic evidence also suggests a strong link between the increased use of import restrictive trade remedies such as anti-dumping measures and safeguards and an economic downturn associated with recessions. The Global Anti-dumping Database shows that the implementation of product level trade remedies increased by 34 percent in 2008 and in the first quarter of 2009 the utilization increased by 22.3 percent. The imposition of definitive measures in 2009 is projected to be 18.5 percent higher than in 2008.
A number of countries have implemented trade remedies, with South-South trade increasingly being affected by these measures. Developing countries have initiated 74 percent of trade remedy investigations in the period from the first quarter in 2008 to the same period in 2009 with the targeted exporters also primarily being located in other developing countries. However these inward-looking policies risk the retardation of market corrections, distorting trade and triggering retaliation by trade partners.
African countries have not played a major role in the current utilization of import restrictions even though some of these countries’ major trading partners have implemented different forms of import restrictions, investment and finance support and job protection measures. The increased implementation of protectionist policies by or against developing and least developing countries can jeopardise growth prospects and developmental goals, especially for African countries.
* Protectionism can lead to higher unemployment and prices with an increase in debt. Protectionist policies arguably lead to an increase in the cost of consumer goods and production inputs. Due to the protection of domestic industries, foreign competition is reduced which can have the undesired effect of inefficient domestic firms.
* Export subsidies are concentrated on few products, including dairy, beef and fruits and vegetables. These products can often be produced and exported more efficiently by developing countries. However an increase in export subsidies penalizes developing country producers which do not have access to subsidies and provide an incentive to over produce. This can lead to a surplus in the market leading to lower world prices and limiting the ability of developing countries to compete in local and export markets. African economies are dependant on agricultural exports thus an increase in subsidies can lead to a decrease in revenue and a deterioration of the trade balance for many African nations.
* If countries take advantage of the gap between applied and bound rates (water in the tariffs) the potential negative impact on world trade and welfare has been estimated at a decline of 7.7 percent in world trade and US $ 353 billion in world real income. The increase of tariffs on agricultural products will have a dramatic effect on exports and welfare for developing and least developed countries.
The World Trade Organisation (WTO) and the World Bank have indicated that the contribution of protectionist policies to the decline in trade has been limited to date, however looking forward there is a risk of a retreat from trade liberalization and open border policies which has been followed in the past decade. Although the level of trade affected by protectionist policies has thus far been small for most economies, these policies can have important welfare-distorting effects beyond the loss of imports and losses to domestic consumers.
As the financial crisis puts increase pressure on African economies the question remains whether governments will resist political pressure to utilize the implementation of protectionist measures to protect domestic industry and employment? South Africa has already indicated that they are considering raising import tariffs on garments to maximum levels agreed to by South Africa in the WTO. Is this an indication of policy measures to come by African countries as economic activity decrease due to the global recession?
Willemien Denner, a tralac Researcher, On increased protectionism and the implication for developing countries.
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=69150&cat_id=1059
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Saturday, June 27, 2009
Russia resumes efforts for influence on Africa
Russian President Dmitry Medvedev on Friday ended a four-day trip to Africa that took him to Egypt, Nigeria, Namibia and Angola.
The tour was highlighted by the signing of a series of documents ranging from a strategic cooperation pact to energy deals.
Medvedev's visit, the second by a Russian president to sub-Saharan Africa, sent a signal to the world that Russia is striving to regain the influence it had on the resource-rich continent before the collapse of the Soviet Union.
ECONOMIC TIES
Medvedev, with a delegation of officials and businessmen in tow, seems to have focused his trip on helping Russian firms that have lagged behind their western peers in the pursuit of a bigger business presence on the natural resources laden continent.
Egypt, the first stop on Medvedev's trip, is Russia's largest trade partner among the four countries he visited. Trade volume between the two countries was 1.7 billion U.S. dollars last year, and the number of Egypt-bound Russian tourists reached 1.8 million in 2008, the Kremlin said.
During his visit to Cairo, Medvedev and his Egyptian counterpart Hosni Mubarak signed a strategic partnership treaty that specifies the main areas of bilateral cooperation, including a planned free trade zone between the two countries.
The Russian president also called for expanded commercial ties, saying projects in the energy field, high-tech industries and outer space are promising.
Energy cooperation topped Medvedev's agenda in Nigeria as Gazprom, Russia's state gas monopoly, had been picked as a core investor in the exploration of the African country's gas reserves.
Gazprom and the Nigerian National Petroleum Corp. signed documents on establishing a joint venture. Boris Ivanov, head of Gazprom International, said the venture would invest up to 400 million dollars to build a 360 km pipeline from the southern Niger Delta to northern Nigeria, with construction beginning next year.
"Gazprom still wants to buy all gas produced around Europe and resell it on its own terms," said Mikhail Korchemkin, head of the East European Gas Analysis, a U.S.-based consultancy.
As a business model, re-exporting African gas does not make sense, but geopolitical motivations play a part there, said Korchemkin, suggesting that Russia intends to reinforce its grip on Europe's energy supply.
In a move to boost Russian investment in Namibia, Gazprombank signed a deal with the national oil company Namcor, pledging to finance the construction of a gas power plant that would export electricity to South Africa.
Russia's Federal Fisheries Agency and Namibia's Ministry of Fisheries and Sea Resources also signed a memorandum of understanding, under which Russian fishermen would be allowed in the waters off Namibia, one of the biggest fish exporters in Africa.
Medvedev's last leg was Angola, which currently holds the presidency of the Organization of Petroleum Exporting Countries.
Russia's state diamond monopoly Alrosa has already started a branch in the Angolan capital of Luanda. Apart from cooperation on diamond mining,
Medvedev promised to help Angola modernize industries such as manufacturing and telecommunication, and launch an Angolan telecom satellite called "AngoSat."
MIDEAST PEACE PROCESS
Although Medvedev's trip to Africa might be driven by a desire to boost economic ties, the political significance of the visit should never be neglected.
The visit came on the heels of U.S. President Barack Obama's visit to Egypt. Obama delivered a keynote speech at Cairo University during the trip and vowed to find a fair solution to the Israeli-Palestinian conflict.
The region has already rocked by mass protests over the Iranian presidential elections, making Medvedev's visit to the regional power broker "extremely timely," The Moscow Times quoted Yevgeny Satanovsky, director of the Institute of Middle Eastern Studies, as saying.
Medvedev and Mubarak "spent quite some time" during the visit discussing conflicts in the Middle East, in particular continuing the Russian push for a peace conference to be held in Moscow by the end of this year.
"Russia is exerting its best efforts to resume the peace talks in the Middle East according to the two-state solution and freezing settlements," Medvedev said after talks with Mubarak, who hailed
Russia as "one of the greatest countries in the world and has clout on the Middle East peace process."
Russia is a member of the International Quartet that is intent on resolving the Middle East conflict. The Quartet, which also includes the United States, the European Union and the United Nations, endorsed the Roadmap that calls on Israel and the Palestinians to take a series of steps ending with Palestinian statehood.
Meanwhile, Medvedev, in his first visit to the Arab League headquarters in Cairo, said he welcomes all Arab countries to attend the international peace conference in Moscow.
"Lasting security can not be achieved in the Middle East without just and comprehensive compromise to the Arab-Israeli conflict," Medvedev said.
"This comprehensive compromise has to end up with establishing an independent Palestinian state living in peace with all nations in the region including Israel, with its capital in East Jerusalem," he stressed.
Medvedev proposed in January a Middle East peace conference to be held in Moscow in the first half of 2009.
The proposal was welcomed by Palestinians and Arabs, but was rejected by the United States and Israel, which were concerned with Russia's alleged engagement with militant Hamas and its military aid to the moderate Palestinian National Authority (PNA).
Neither Medvedev nor Obama unveiled any sensational initiatives, but both reiterated the well-known stances of their countries on the Middle East peace process, said Maria Appakova, a commentator with the Russian news agency RIA Novosti.
"The Russian policy in the Middle East cannot be more balanced than it already is," and the key is what will happen if Moscow and Washington coordinate the principles of their Middle East policies, she said.
By Xinhua writer Yu Maofeng Editor: Mu Xuequan
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
The tour was highlighted by the signing of a series of documents ranging from a strategic cooperation pact to energy deals.
Medvedev's visit, the second by a Russian president to sub-Saharan Africa, sent a signal to the world that Russia is striving to regain the influence it had on the resource-rich continent before the collapse of the Soviet Union.
ECONOMIC TIES
Medvedev, with a delegation of officials and businessmen in tow, seems to have focused his trip on helping Russian firms that have lagged behind their western peers in the pursuit of a bigger business presence on the natural resources laden continent.
Egypt, the first stop on Medvedev's trip, is Russia's largest trade partner among the four countries he visited. Trade volume between the two countries was 1.7 billion U.S. dollars last year, and the number of Egypt-bound Russian tourists reached 1.8 million in 2008, the Kremlin said.
During his visit to Cairo, Medvedev and his Egyptian counterpart Hosni Mubarak signed a strategic partnership treaty that specifies the main areas of bilateral cooperation, including a planned free trade zone between the two countries.
The Russian president also called for expanded commercial ties, saying projects in the energy field, high-tech industries and outer space are promising.
Energy cooperation topped Medvedev's agenda in Nigeria as Gazprom, Russia's state gas monopoly, had been picked as a core investor in the exploration of the African country's gas reserves.
Gazprom and the Nigerian National Petroleum Corp. signed documents on establishing a joint venture. Boris Ivanov, head of Gazprom International, said the venture would invest up to 400 million dollars to build a 360 km pipeline from the southern Niger Delta to northern Nigeria, with construction beginning next year.
"Gazprom still wants to buy all gas produced around Europe and resell it on its own terms," said Mikhail Korchemkin, head of the East European Gas Analysis, a U.S.-based consultancy.
As a business model, re-exporting African gas does not make sense, but geopolitical motivations play a part there, said Korchemkin, suggesting that Russia intends to reinforce its grip on Europe's energy supply.
In a move to boost Russian investment in Namibia, Gazprombank signed a deal with the national oil company Namcor, pledging to finance the construction of a gas power plant that would export electricity to South Africa.
Russia's Federal Fisheries Agency and Namibia's Ministry of Fisheries and Sea Resources also signed a memorandum of understanding, under which Russian fishermen would be allowed in the waters off Namibia, one of the biggest fish exporters in Africa.
Medvedev's last leg was Angola, which currently holds the presidency of the Organization of Petroleum Exporting Countries.
Russia's state diamond monopoly Alrosa has already started a branch in the Angolan capital of Luanda. Apart from cooperation on diamond mining,
Medvedev promised to help Angola modernize industries such as manufacturing and telecommunication, and launch an Angolan telecom satellite called "AngoSat."
MIDEAST PEACE PROCESS
Although Medvedev's trip to Africa might be driven by a desire to boost economic ties, the political significance of the visit should never be neglected.
The visit came on the heels of U.S. President Barack Obama's visit to Egypt. Obama delivered a keynote speech at Cairo University during the trip and vowed to find a fair solution to the Israeli-Palestinian conflict.
The region has already rocked by mass protests over the Iranian presidential elections, making Medvedev's visit to the regional power broker "extremely timely," The Moscow Times quoted Yevgeny Satanovsky, director of the Institute of Middle Eastern Studies, as saying.
Medvedev and Mubarak "spent quite some time" during the visit discussing conflicts in the Middle East, in particular continuing the Russian push for a peace conference to be held in Moscow by the end of this year.
"Russia is exerting its best efforts to resume the peace talks in the Middle East according to the two-state solution and freezing settlements," Medvedev said after talks with Mubarak, who hailed
Russia as "one of the greatest countries in the world and has clout on the Middle East peace process."
Russia is a member of the International Quartet that is intent on resolving the Middle East conflict. The Quartet, which also includes the United States, the European Union and the United Nations, endorsed the Roadmap that calls on Israel and the Palestinians to take a series of steps ending with Palestinian statehood.
Meanwhile, Medvedev, in his first visit to the Arab League headquarters in Cairo, said he welcomes all Arab countries to attend the international peace conference in Moscow.
"Lasting security can not be achieved in the Middle East without just and comprehensive compromise to the Arab-Israeli conflict," Medvedev said.
"This comprehensive compromise has to end up with establishing an independent Palestinian state living in peace with all nations in the region including Israel, with its capital in East Jerusalem," he stressed.
Medvedev proposed in January a Middle East peace conference to be held in Moscow in the first half of 2009.
The proposal was welcomed by Palestinians and Arabs, but was rejected by the United States and Israel, which were concerned with Russia's alleged engagement with militant Hamas and its military aid to the moderate Palestinian National Authority (PNA).
Neither Medvedev nor Obama unveiled any sensational initiatives, but both reiterated the well-known stances of their countries on the Middle East peace process, said Maria Appakova, a commentator with the Russian news agency RIA Novosti.
"The Russian policy in the Middle East cannot be more balanced than it already is," and the key is what will happen if Moscow and Washington coordinate the principles of their Middle East policies, she said.
By Xinhua writer Yu Maofeng Editor: Mu Xuequan
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
A Buffett Turns to Farming in Africa
Warren’s son Howard has quietly become a player in the fight against global hunger
After a meeting with farmers in Fufuo, Ghana, Howard Buffett stood up to shake hands, African style. He extended his right arm, marked with a faint scar from a cheetah bite, and then launched into a rapid combination of finger snapping and palm slapping.
The middle child of Warren Buffett is an unassuming Illinois soybean and corn farmer. But for the past four years, he has played a behind-the-scenes role in the global war against hunger. Given a small portion of his father’s fortune for philanthropy, he spends much of the year traveling through Africa, experimenting with ideas for helping poor farmers produce enough crops to feed their families and so lessen the continent’s food shortage. His foundation is spending about $38 million this year on projects such as developing a disease-resistant sweet potato, encouraging poachers to switch to farming, providing micro credits, and helping farmers market their crops to United Nations’ hunger-relief programs. Probably his most ambitious project under way would give African corn breeders royalty-free access to Monsanto’s biotechnology for drought-tolerant corn.
As the global economic downturn sets back decades of work to end world hunger, Warren Buffett's son, Howard Buffett, takes on a surprising, little-known role on the front lines. Mr. Buffett travels from Ghana to Togo to Benin, trying to spread approaches to farming that he's found successful on his Illinois farm. Scott Kilman and Roger Thurow report.
His father’s very public decision in 2006 to bequeath no more than a fraction of his fortune, then worth $40 billion, to his children’s foundations has put Howard on his unusual course. The famous stock picker opposes big inheritances; they coddle the second generation and concentrate wealth, he argues. Each of his children receives an annual donation of Berkshire Hathaway shares, which shrinks in size each year, for their charitable foundations. The sage of Omaha has never been to Africa and, of his son’s arduous lifestyle, says, “I would hate it.”
When Howard, 54 years old, was 23 he cashed in stock from his grandfather to buy a bulldozer to start an excavating business. What he really wanted to do was farm, but he didn’t have the money. His father agreed to buy a modest Nebraska farm for his son, but in classic Buffett fashion, he charged him market-rate rent.
Howard became chairman of a state agency aimed at encouraging the construction of ethanol plants in Nebraska and then won election to the Board of Commissioners that governs the county in which Omaha sits. Howard’s grasp of farm politics, as well as his last name, put him on the radar of Dwayne Andreas, the cagey chairman and chief executive of grain-processing behemoth Archer-Daniels-Midland Co. in Decatur, Ill.
Mr. Buffett joined ADM’s board and became a corporate vice president, posts that gave him a global perspective on agriculture as he began buying land for an Illinois farm. Mr. Buffett left ADM in 1995, upset about a price-fixing scandal at the company and joined a nearby manufacturer of steel grain bins called GSI Group. Soon he was off to South Africa to drum up business from its large grain farmers.
He traces his interest in fighting global hunger to his hobby taking photographs on those business trips in Africa. As he was photographing migrating wildebeest and zebra in 2000 from a rickety plane, trying to position his camera for a picture, he saw scars on the ground where poor farmers had used fire to clear desperately needed land. Mr. Buffett realized that he couldn’t protect Africa’s environment without first fighting its food shortage.
View Full Image
Melissa L. Hickox
Howard Buffett teaches farmers in a Burundi cornfield. Agriculture is the main livelihood for citizens of the country, one of the world’s poorest.
“I’m watching this thinking, ‘They are going to destroy the last forest,’” Mr. Buffett later recalled. “It was an epiphany for me: The hungry can’t worry about conservation. I realized you can’t save the environment unless you give people a chance to feed themselves better.”
The death of his mother, Susan Buffett, from a stroke in 2004 helped to crystallize his focus on the poor. It also gave him the means to make a difference. The Buffett children had always expected that their mother’s foundation would oversee the distribution of their parents’ vast wealth. She had long supported medical research, education, abortion rights and nuclear disarmament, and had encouraged her children to be socially conscious. She brought young Howard along when she went into Omaha’s housing projects to help a Cub Scout troop.
Her death at 72 forced Warren Buffett to confront how to start giving away his fortune. He settled on directing the bulk of his Berkshire Hathaway shares to the Bill and Melinda Gates Foundation. He trusted Mr. Gates, a Berkshire Hathaway board member and friend who played bridge with him. What’s more, the Gates Foundation had the infrastructure to handle a gift of such size.
On top of this, Warren Buffett promised each of his three children’s foundations annual gifts of stock initially worth $50 million. For Howard, the gift meant that the Howard G. Buffett Foundation, from which he doesn’t draw a salary, could increase its annual spending at least eightfold.
It was ordained that Howard and his two siblings would see the family fortune given away rather than have it to spend on themselves. His father, who lives far below his means in a modest Omaha house, has argued publicly that it does little good for society when children inherit great wealth by virtue of an “ovarian lottery.” The multiplier effect is far more powerful, the argument goes, if fortunes are used to help the less fortunate rather than to suckle a bloodline of trust funders. Warren Buffett went to Congress in November 2007 to argue in favor of the estate tax, saying it counters an unhealthy concentration of wealth. Of his middle child, he says, “he’s got my money and his mother’s heart.”
With one foot in American farming and the other in Africa, Mr. Buffett has developed his vision for African farming. With oil prices so volatile, he thinks few farmers in African villages should use the same type of high-tech, mechanized farming he practices in Illinois. A typical farm in the Midwestern U.S.—of the sort Mr. Buffett owns—is an investment of millions of dollars.
“It takes a lot of fuel to run my equipment. And for inorganic fertilizer. And pesticides. How can that be the right answer for someone who has the opportunity to start from the beginning?” Mr. Buffett says.
While many economists and anti-hunger advocates call for a Green Revolution in Africa, Mr. Buffett shuns the phrase because it refers to the agricultural boom that swept Asia in the 1960s and 1970s. Modern seeds as well as hefty applications of fertilizer and water caused Asia’s wheat and rice crops to rapidly swell.
Mr. Buffett believes that getting Africa to feed itself is a lot more complicated. Africa’s geography is so diverse that its population has to depend on far more than two crops for its calories. Many of Africa’s farmers are poorer, less educated and even more isolated from infrastructure such as roads and irrigation systems than Asia’s were.
So Mr. Buffett is looking for ways to help African farmers increase their harvests without increasing their costs, thus his interest in developing plants that resist disease and drought.
To lobby for Africa aid, Mr. Buffett invites politicians, scientists, entertainers, and corporate executives to squeeze into the cab of his Deere tractor in Illinois, where he has their full attention as he navigates corn and soybean fields with global positioning technology. One of the few people he has let drive his harvesting combine, worth hundreds of thousands of dollars, is Shakira, the pop singer from Colombia who has an education foundation.
It’s hard to measure the impact of Howard Buffett’s foundation, something Mr. Buffett himself acknowledges. He does most of the work finding and visiting projects. He employs eight people, mostly in administrative roles. One man is based in South Africa overseeing research on Mr. Buffett’s 6,000 acres of farmland outside Johannesburg. It was there on a wildlife preserve that he set up that a cheetah bit him.
Mr. Buffett figures his foundation’s projects have helped about 1.5 million Africans so far. He hopes that the crop-breeding work he is supporting will eventually help millions more African farmers feed their families.
His father, for one, counsels patience. “If you bring your heart to something it makes a big difference,” says Warren Buffett. “And he has time. He didn’t have to wait until he was 80 years old.”
For the first time since the early 1970s, the prevalence of hunger in the world is climbing. According to the U.N.’s Food and Agriculture Organization in Rome, 15% of the world’s population is hungry, up from 13% at the middle of this decade. FAO economists are predicting that the number of chronically hungry people will climb this year to 1.02 billion, up 11.5% from 2008.
As soon as next year the world could resume consuming more grain than its farmers produce. That global trend earlier this decade is what drained world grain stockpiles, setting the stage for last year’s price shocks. The fear is that food prices will leap when the world economy recovers.
“I am more discouraged than I was when I started. The problems are so huge,” Mr. Buffett says.
In February 2007, his SUV pulled into Fufuo, a village in central Ghana. Accompanied by Ghanaian agronomist Kofi Boa, he hurried into a large cinder-block building where 30 farmers had been waiting, sheltered from the sun.
Back home, Mr. Buffett owned 800 acres of corn and soybeans and a fleet of the most modern John Deere implements. Now, he hoped to learn something from farmers who scratched the dirt with sticks and machetes. Mr. Boa, the agronomist, had been coaching them to replace slash-and-burn farming with a practice he called “no-till.”
In many African villages, poor farmers—who are often women—had traditionally made room for their crops by chopping down the brush and trees on a few acres of tribal land. It is hard on the farmer and the environment. The land is laid bare to erosion. As the soil deteriorates, farmers work harder and harder to produce food until they have to move on to another spot, repeating the cycle.
Mr. Boa told Fufuo’s farmers to disturb the ground as little as possible. Other than poking holes in the dirt to plant their seeds, the ground was not to be hoed or vegetation burned. Organic residue—such as leaves, stalks, and roots—was valuable, not trash. Fufuo’s farmers were taught to make room for their seeds shortly before planting time by squirting the competing vegetation with Chinese-made weed killer dispensed from backpacks.
The village quickly discovered that no-till plots yielded bigger crops with far less labor. The mulch acts as a sponge when it rains, banking water for crops, and then breaks down into plant food. The time the farmers saved by no longer hoeing weeds and cutting brush was time for money-making endeavors. Some started to raise cocoa trees, a crop prized by Ghana’s government for its export earnings; others began to raise chickens, feeding them with their surplus grain.
“How many seeds of corn do you plant on a hectare?” asked Mr. Buffett as he peered through thick eyeglasses and jotted down answers in a notebook. “Can you farm more land now?” he continued. “How much corn did you harvest?”
Further convinced he should support the no-till training of farmers, Mr. Buffett left. After his SUV drove off, swallowed in red dust, the farmers were told that their visitor was the son of a billionaire named Warren Buffett.
By SCOTT KILMAN and ROGER THUROW - in the The Wall Street Journal
http://online.wsj.com/article/SB10001424052970204621904574246440378843148.html
—Adapted from “ENOUGH: Why the World’s Poorest Starve In an Age of Plenty” by Roger Thurow and Scott Kilman. Copyright 2009 by Roger Thurow and Scott Kilman. Published by PublicAffairs, a member of the Perseus Books Group.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
After a meeting with farmers in Fufuo, Ghana, Howard Buffett stood up to shake hands, African style. He extended his right arm, marked with a faint scar from a cheetah bite, and then launched into a rapid combination of finger snapping and palm slapping.
The middle child of Warren Buffett is an unassuming Illinois soybean and corn farmer. But for the past four years, he has played a behind-the-scenes role in the global war against hunger. Given a small portion of his father’s fortune for philanthropy, he spends much of the year traveling through Africa, experimenting with ideas for helping poor farmers produce enough crops to feed their families and so lessen the continent’s food shortage. His foundation is spending about $38 million this year on projects such as developing a disease-resistant sweet potato, encouraging poachers to switch to farming, providing micro credits, and helping farmers market their crops to United Nations’ hunger-relief programs. Probably his most ambitious project under way would give African corn breeders royalty-free access to Monsanto’s biotechnology for drought-tolerant corn.
As the global economic downturn sets back decades of work to end world hunger, Warren Buffett's son, Howard Buffett, takes on a surprising, little-known role on the front lines. Mr. Buffett travels from Ghana to Togo to Benin, trying to spread approaches to farming that he's found successful on his Illinois farm. Scott Kilman and Roger Thurow report.
His father’s very public decision in 2006 to bequeath no more than a fraction of his fortune, then worth $40 billion, to his children’s foundations has put Howard on his unusual course. The famous stock picker opposes big inheritances; they coddle the second generation and concentrate wealth, he argues. Each of his children receives an annual donation of Berkshire Hathaway shares, which shrinks in size each year, for their charitable foundations. The sage of Omaha has never been to Africa and, of his son’s arduous lifestyle, says, “I would hate it.”
When Howard, 54 years old, was 23 he cashed in stock from his grandfather to buy a bulldozer to start an excavating business. What he really wanted to do was farm, but he didn’t have the money. His father agreed to buy a modest Nebraska farm for his son, but in classic Buffett fashion, he charged him market-rate rent.
Howard became chairman of a state agency aimed at encouraging the construction of ethanol plants in Nebraska and then won election to the Board of Commissioners that governs the county in which Omaha sits. Howard’s grasp of farm politics, as well as his last name, put him on the radar of Dwayne Andreas, the cagey chairman and chief executive of grain-processing behemoth Archer-Daniels-Midland Co. in Decatur, Ill.
Mr. Buffett joined ADM’s board and became a corporate vice president, posts that gave him a global perspective on agriculture as he began buying land for an Illinois farm. Mr. Buffett left ADM in 1995, upset about a price-fixing scandal at the company and joined a nearby manufacturer of steel grain bins called GSI Group. Soon he was off to South Africa to drum up business from its large grain farmers.
He traces his interest in fighting global hunger to his hobby taking photographs on those business trips in Africa. As he was photographing migrating wildebeest and zebra in 2000 from a rickety plane, trying to position his camera for a picture, he saw scars on the ground where poor farmers had used fire to clear desperately needed land. Mr. Buffett realized that he couldn’t protect Africa’s environment without first fighting its food shortage.
View Full Image
Melissa L. Hickox
Howard Buffett teaches farmers in a Burundi cornfield. Agriculture is the main livelihood for citizens of the country, one of the world’s poorest.
“I’m watching this thinking, ‘They are going to destroy the last forest,’” Mr. Buffett later recalled. “It was an epiphany for me: The hungry can’t worry about conservation. I realized you can’t save the environment unless you give people a chance to feed themselves better.”
The death of his mother, Susan Buffett, from a stroke in 2004 helped to crystallize his focus on the poor. It also gave him the means to make a difference. The Buffett children had always expected that their mother’s foundation would oversee the distribution of their parents’ vast wealth. She had long supported medical research, education, abortion rights and nuclear disarmament, and had encouraged her children to be socially conscious. She brought young Howard along when she went into Omaha’s housing projects to help a Cub Scout troop.
Her death at 72 forced Warren Buffett to confront how to start giving away his fortune. He settled on directing the bulk of his Berkshire Hathaway shares to the Bill and Melinda Gates Foundation. He trusted Mr. Gates, a Berkshire Hathaway board member and friend who played bridge with him. What’s more, the Gates Foundation had the infrastructure to handle a gift of such size.
On top of this, Warren Buffett promised each of his three children’s foundations annual gifts of stock initially worth $50 million. For Howard, the gift meant that the Howard G. Buffett Foundation, from which he doesn’t draw a salary, could increase its annual spending at least eightfold.
It was ordained that Howard and his two siblings would see the family fortune given away rather than have it to spend on themselves. His father, who lives far below his means in a modest Omaha house, has argued publicly that it does little good for society when children inherit great wealth by virtue of an “ovarian lottery.” The multiplier effect is far more powerful, the argument goes, if fortunes are used to help the less fortunate rather than to suckle a bloodline of trust funders. Warren Buffett went to Congress in November 2007 to argue in favor of the estate tax, saying it counters an unhealthy concentration of wealth. Of his middle child, he says, “he’s got my money and his mother’s heart.”
With one foot in American farming and the other in Africa, Mr. Buffett has developed his vision for African farming. With oil prices so volatile, he thinks few farmers in African villages should use the same type of high-tech, mechanized farming he practices in Illinois. A typical farm in the Midwestern U.S.—of the sort Mr. Buffett owns—is an investment of millions of dollars.
“It takes a lot of fuel to run my equipment. And for inorganic fertilizer. And pesticides. How can that be the right answer for someone who has the opportunity to start from the beginning?” Mr. Buffett says.
While many economists and anti-hunger advocates call for a Green Revolution in Africa, Mr. Buffett shuns the phrase because it refers to the agricultural boom that swept Asia in the 1960s and 1970s. Modern seeds as well as hefty applications of fertilizer and water caused Asia’s wheat and rice crops to rapidly swell.
Mr. Buffett believes that getting Africa to feed itself is a lot more complicated. Africa’s geography is so diverse that its population has to depend on far more than two crops for its calories. Many of Africa’s farmers are poorer, less educated and even more isolated from infrastructure such as roads and irrigation systems than Asia’s were.
So Mr. Buffett is looking for ways to help African farmers increase their harvests without increasing their costs, thus his interest in developing plants that resist disease and drought.
To lobby for Africa aid, Mr. Buffett invites politicians, scientists, entertainers, and corporate executives to squeeze into the cab of his Deere tractor in Illinois, where he has their full attention as he navigates corn and soybean fields with global positioning technology. One of the few people he has let drive his harvesting combine, worth hundreds of thousands of dollars, is Shakira, the pop singer from Colombia who has an education foundation.
It’s hard to measure the impact of Howard Buffett’s foundation, something Mr. Buffett himself acknowledges. He does most of the work finding and visiting projects. He employs eight people, mostly in administrative roles. One man is based in South Africa overseeing research on Mr. Buffett’s 6,000 acres of farmland outside Johannesburg. It was there on a wildlife preserve that he set up that a cheetah bit him.
Mr. Buffett figures his foundation’s projects have helped about 1.5 million Africans so far. He hopes that the crop-breeding work he is supporting will eventually help millions more African farmers feed their families.
His father, for one, counsels patience. “If you bring your heart to something it makes a big difference,” says Warren Buffett. “And he has time. He didn’t have to wait until he was 80 years old.”
For the first time since the early 1970s, the prevalence of hunger in the world is climbing. According to the U.N.’s Food and Agriculture Organization in Rome, 15% of the world’s population is hungry, up from 13% at the middle of this decade. FAO economists are predicting that the number of chronically hungry people will climb this year to 1.02 billion, up 11.5% from 2008.
As soon as next year the world could resume consuming more grain than its farmers produce. That global trend earlier this decade is what drained world grain stockpiles, setting the stage for last year’s price shocks. The fear is that food prices will leap when the world economy recovers.
“I am more discouraged than I was when I started. The problems are so huge,” Mr. Buffett says.
In February 2007, his SUV pulled into Fufuo, a village in central Ghana. Accompanied by Ghanaian agronomist Kofi Boa, he hurried into a large cinder-block building where 30 farmers had been waiting, sheltered from the sun.
Back home, Mr. Buffett owned 800 acres of corn and soybeans and a fleet of the most modern John Deere implements. Now, he hoped to learn something from farmers who scratched the dirt with sticks and machetes. Mr. Boa, the agronomist, had been coaching them to replace slash-and-burn farming with a practice he called “no-till.”
In many African villages, poor farmers—who are often women—had traditionally made room for their crops by chopping down the brush and trees on a few acres of tribal land. It is hard on the farmer and the environment. The land is laid bare to erosion. As the soil deteriorates, farmers work harder and harder to produce food until they have to move on to another spot, repeating the cycle.
Mr. Boa told Fufuo’s farmers to disturb the ground as little as possible. Other than poking holes in the dirt to plant their seeds, the ground was not to be hoed or vegetation burned. Organic residue—such as leaves, stalks, and roots—was valuable, not trash. Fufuo’s farmers were taught to make room for their seeds shortly before planting time by squirting the competing vegetation with Chinese-made weed killer dispensed from backpacks.
The village quickly discovered that no-till plots yielded bigger crops with far less labor. The mulch acts as a sponge when it rains, banking water for crops, and then breaks down into plant food. The time the farmers saved by no longer hoeing weeds and cutting brush was time for money-making endeavors. Some started to raise cocoa trees, a crop prized by Ghana’s government for its export earnings; others began to raise chickens, feeding them with their surplus grain.
“How many seeds of corn do you plant on a hectare?” asked Mr. Buffett as he peered through thick eyeglasses and jotted down answers in a notebook. “Can you farm more land now?” he continued. “How much corn did you harvest?”
Further convinced he should support the no-till training of farmers, Mr. Buffett left. After his SUV drove off, swallowed in red dust, the farmers were told that their visitor was the son of a billionaire named Warren Buffett.
By SCOTT KILMAN and ROGER THUROW - in the The Wall Street Journal
http://online.wsj.com/article/SB10001424052970204621904574246440378843148.html
—Adapted from “ENOUGH: Why the World’s Poorest Starve In an Age of Plenty” by Roger Thurow and Scott Kilman. Copyright 2009 by Roger Thurow and Scott Kilman. Published by PublicAffairs, a member of the Perseus Books Group.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Foreign Investment Cushions Downturn in Africa
CAPE TOWN, South Africa -- Foreign investment from China and the Persian Gulf nations is helping Africa weather the global downturn, but some say the funds come at a high cost.
Jiang Jianqing, chairman of the state-run Industrial & Commercial Bank of China Ltd., told African leaders here this month at the World Economic Forum on Africa that Chinese investment in Africa is growing and becoming more diversified, even as the global downturn curbs investment by other countries.
China, which has been an African investor for more than a decade, plans to step up activities and work on its reputation in Sub-Saharan Africa as an employer and business partner.
This month, ICBC and Standard Bank Group Ltd., of South Africa, finalized a deal to expand Botswana's main coal-fired power station. China National Electric Equipment Corporation, a top ICBC client, was awarded the $970 million contract to supply and expand the station to ramp up the diamond-rich nation's energy supply.
ICBC is pursuing 65 multimillion-dollar projects across the continent through its partnership with Standard Bank, in which it bought a 20% stake in 2007, Mr. Jiang said.
Chinese investment, initially focused on shoring up access to raw materials as its economy grew, is moving into sectors beyond infrastructure and mining.
Persian Gulf investors, too, although hammered by the downturn, say they are sticking with African projects. Soud Ba'alawy, executive chairman of Dubai Group, the state-owned investment group, said Dubai is pursuing opportunities in the continent. Falling oil prices and a plummeting real-estate market forced many big Dubai investors to retrench and rethink projects, particularly ones far from home. But as oil prices rebound and local stock markets rise, Persian Gulf investors are combing Africa for opportunities.
Foreign-investment flows could be a critical lifeline for some Sub-Saharan African economies. The region's income has been hit by falling commodity prices and dwindling government revenue. Remittances have declined as Africans abroad have been laid off. This year, foreign inflows to developing countries are expected to drop 82%, the Institute of International Finance says.
The increased interest from China and Gulf countries, as well as India, has helped to embolden some African governments to demand more favorable terms or to create a more competitive business environment. Officials in a number of African governments say the Chinese and Arab governments, compared with their Western counterparts, attach relatively few conditions to aid or investment projects.
In African countries where China has invested, many local people complain that the Chinese companies import everything -- including bottled water and toilet paper -- from home, bypassing the domestic economy. In mineral-rich countries such as Zambia and the Democratic Republic of Congo, some Chinese companies have a reputation for exploiting workers.
China's government has said it believes its investments in Africa benefit both sides, and that its involvement there is welcomed by most Africans.
In 2005, 46 Zambians were killed in an explosion at a copper mine owned by China's state metals conglomerate. A government inquiry showed the company had cut corners on safety and banned union organizing.
The Chinese company paid compensation to the victims' families and allowed a union to be formed. The following year, Chinese security guards at the mine opened fire on Zambian workers who were protesting the company's failure to improve working conditions and to deliver back pay promised in a new union deal.
In 2007, a representative said the company was complying with Zambian law and had given a full report on the matter to the Zambian government. The incidents remain a sensitive subject for local miners and politicians in Zambia's Copperbelt, the country's industrial base.
"Bringing the Chinese into our industry is like importing poverty and exporting wealth," said Chishimba Kambwili, the member of parliament from Luanshya, in the Copperbelt, in an interview this year. "They pay very low salaries, and they deplete our resources without our country getting value."
In Congo, the International Monetary Fund has criticized a multi-million-dollar infrastructure deal China made last year in exchange for metals.
Mr. Jiang acknowledged that there have been problems in the past and said the Chinese government is working to improve relations.
By SARAH CHILDRESS - Printed in The Wall Street Journal, page A8
http://online.wsj.com/article/SB124607031091264351.html
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Jiang Jianqing, chairman of the state-run Industrial & Commercial Bank of China Ltd., told African leaders here this month at the World Economic Forum on Africa that Chinese investment in Africa is growing and becoming more diversified, even as the global downturn curbs investment by other countries.
China, which has been an African investor for more than a decade, plans to step up activities and work on its reputation in Sub-Saharan Africa as an employer and business partner.
This month, ICBC and Standard Bank Group Ltd., of South Africa, finalized a deal to expand Botswana's main coal-fired power station. China National Electric Equipment Corporation, a top ICBC client, was awarded the $970 million contract to supply and expand the station to ramp up the diamond-rich nation's energy supply.
ICBC is pursuing 65 multimillion-dollar projects across the continent through its partnership with Standard Bank, in which it bought a 20% stake in 2007, Mr. Jiang said.
Chinese investment, initially focused on shoring up access to raw materials as its economy grew, is moving into sectors beyond infrastructure and mining.
Persian Gulf investors, too, although hammered by the downturn, say they are sticking with African projects. Soud Ba'alawy, executive chairman of Dubai Group, the state-owned investment group, said Dubai is pursuing opportunities in the continent. Falling oil prices and a plummeting real-estate market forced many big Dubai investors to retrench and rethink projects, particularly ones far from home. But as oil prices rebound and local stock markets rise, Persian Gulf investors are combing Africa for opportunities.
Foreign-investment flows could be a critical lifeline for some Sub-Saharan African economies. The region's income has been hit by falling commodity prices and dwindling government revenue. Remittances have declined as Africans abroad have been laid off. This year, foreign inflows to developing countries are expected to drop 82%, the Institute of International Finance says.
The increased interest from China and Gulf countries, as well as India, has helped to embolden some African governments to demand more favorable terms or to create a more competitive business environment. Officials in a number of African governments say the Chinese and Arab governments, compared with their Western counterparts, attach relatively few conditions to aid or investment projects.
In African countries where China has invested, many local people complain that the Chinese companies import everything -- including bottled water and toilet paper -- from home, bypassing the domestic economy. In mineral-rich countries such as Zambia and the Democratic Republic of Congo, some Chinese companies have a reputation for exploiting workers.
China's government has said it believes its investments in Africa benefit both sides, and that its involvement there is welcomed by most Africans.
In 2005, 46 Zambians were killed in an explosion at a copper mine owned by China's state metals conglomerate. A government inquiry showed the company had cut corners on safety and banned union organizing.
The Chinese company paid compensation to the victims' families and allowed a union to be formed. The following year, Chinese security guards at the mine opened fire on Zambian workers who were protesting the company's failure to improve working conditions and to deliver back pay promised in a new union deal.
In 2007, a representative said the company was complying with Zambian law and had given a full report on the matter to the Zambian government. The incidents remain a sensitive subject for local miners and politicians in Zambia's Copperbelt, the country's industrial base.
"Bringing the Chinese into our industry is like importing poverty and exporting wealth," said Chishimba Kambwili, the member of parliament from Luanshya, in the Copperbelt, in an interview this year. "They pay very low salaries, and they deplete our resources without our country getting value."
In Congo, the International Monetary Fund has criticized a multi-million-dollar infrastructure deal China made last year in exchange for metals.
Mr. Jiang acknowledged that there have been problems in the past and said the Chinese government is working to improve relations.
By SARAH CHILDRESS - Printed in The Wall Street Journal, page A8
http://online.wsj.com/article/SB124607031091264351.html
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Monday, June 8, 2009
Export-Import Bank’s New Africa Pilot Program
The U.S. Export-Import Bank’s Sub-Saharan African Advisory Committee is crafting a pilot project aimed at boosting U.S. exports to the region by offering more competitive financing in line with what is being provided by China and other countries. The U.S. Export-Import Bank’s Sub-Saharan African Advisory Committee is crafting a pilot project aimed at boosting US exports to the region by offering more competitive financing in line with what is being provided by China and other countries (WTD, 5/29/09).
The advisory panel outlined the new initiative at a meeting yesterday. It hopes to have a final proposal ready to take to Ex-Im’s board of directors for approval - and present it to Congressional lawmakers - in September. The initiative calls on the Bank to provide more financing for projects involving products containing up to 49 percent foreign content and match support being provided by non-Organization for Economic Cooperation and Development countries - primarily China. The initiative is aimed at both boosting U.S. exports to Sub-Saharan Africa and making Ex-Im more competitive in the region.
Specifically the proposal outlined yesterday would focus on four areas -
• Competitive Foreign Content Rules - allow 85 percent Ex-Im support for projects as long as there is at least 51 percent US content;
• Enhanced Financing Terms - use the Bank’s “war chest” to match support being offered by the export credit agencies of non-OECD countries and offer
extended 20-year repayment terms for more types of projects;
• Credit Underwriting - expand the Bank’s Special Delegated Authority program for Nigeria to other countries - like Kenya, Senegal and possibly Ghana - and
create the position of senior underwriter for Sub-Saharan Africa and
• Program Champion - designate either an Ex-Im board member or representative of the chairman’s office to oversee the program and lobby Congress.
Boosting U.S. exports to sub-Saharan Africa is one of the biggest priorities for the Bank, new Chairman Fred Hochberg told the advisory panel. U.S. trade with Sub-Saharan Africa fell by 50 percent in the first quarter of 2009 compared to the same period last year - a victim of the global economic crisis, according to Commerce Department data presented to the committee. However, the Bank expects to do about $800 million in financing to Africa this year, up from $575 million last year.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
The advisory panel outlined the new initiative at a meeting yesterday. It hopes to have a final proposal ready to take to Ex-Im’s board of directors for approval - and present it to Congressional lawmakers - in September. The initiative calls on the Bank to provide more financing for projects involving products containing up to 49 percent foreign content and match support being provided by non-Organization for Economic Cooperation and Development countries - primarily China. The initiative is aimed at both boosting U.S. exports to Sub-Saharan Africa and making Ex-Im more competitive in the region.
Specifically the proposal outlined yesterday would focus on four areas -
• Competitive Foreign Content Rules - allow 85 percent Ex-Im support for projects as long as there is at least 51 percent US content;
• Enhanced Financing Terms - use the Bank’s “war chest” to match support being offered by the export credit agencies of non-OECD countries and offer
extended 20-year repayment terms for more types of projects;
• Credit Underwriting - expand the Bank’s Special Delegated Authority program for Nigeria to other countries - like Kenya, Senegal and possibly Ghana - and
create the position of senior underwriter for Sub-Saharan Africa and
• Program Champion - designate either an Ex-Im board member or representative of the chairman’s office to oversee the program and lobby Congress.
Boosting U.S. exports to sub-Saharan Africa is one of the biggest priorities for the Bank, new Chairman Fred Hochberg told the advisory panel. U.S. trade with Sub-Saharan Africa fell by 50 percent in the first quarter of 2009 compared to the same period last year - a victim of the global economic crisis, according to Commerce Department data presented to the committee. However, the Bank expects to do about $800 million in financing to Africa this year, up from $575 million last year.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Tuesday, May 26, 2009
A Round Table with the South African Government and Key Business Leaders August 19th - 21st 2009 in Johannesburg, South Africa.
United States – Southern Africa
Round Table with the Government and Key Business Leaders
≈ 19 - 21 August 2009 – Johannesburg, South Africa ≈
With Presidents Obama and Zuma charting a new era of cooperation between the United States and sub-Saharan Africa, business and government leaders from South and Southern Africa welcome counterparts from the U.S. to an informal dialogue in which CEOs, policymakers and opinion leaders will explore mutually-beneficial links in business, philanthropy, education and corporate responsibility.
Senior representatives of the South African Government and local business leaders will engage in open and off-the-record discussions commercial opportunities in South and Southern Africa. This advanced, interactive forum will facilitate business connections, and enable the participants to gain new perspectives.
Topics to be discussed include: the global financial crisis and its impact on the region; investment in infrastructure; energy; healthcare; financial markets; food processing; homeland security and defence cooperation. Early acceptances include Michael Spicer - CEO, Business Leadership South Africa, Saki Macozoma - Deputy Chairman, Standard Bank, Popo Molefe – Chairman, PetroSA & CEO, Lereko Investments and Chris Hart, Chief Economist, Investment Solutions.
Wednesday, August 19th program begins with presentations by leading experts and business people from the U.S. and South Africa. Following a networking luncheon, there will be one-on-one meetings with appropriate selected individuals and companies.
Invited South African companies include: Eskom, Sasol, Medi-Clinic, Discovery, Netcare, Educor, Barclays-Absa, Firstrand, Development Bank of Southern Africa, Industrial Development Corporation, Transnet, MTN, COEGA, Telkom, Dimension Data and others.
AllWorld Network, Chaired by Professor Michael Porter, Harvard University Business School and Endeavor, South Africa will announce the launch of the South Africa Fast Growth 100, identifying and advancing the next generation of company builders and entrepreneurs. AllWorld co-Founders Deidre M. Coyle Jr, Anne Habiby and Malik Fal, Endeavor, presenting.
Thursday, August 20th is reserved exclusively for business-to-business meetings which will be arranged in advance.
Thursday, August 20th Evening Reception to honor MEMBERS OF THE UNITED STATES CONGRESS
Remarks by:
U.S. Congressman Bobby L. Rush, Chair Subcommittee on Commerce, Trade and Consumer Protection of Energy and Commerce Committee and Co-chair of The African Partnership for Economic Growth (APEG) Caucus - - a new Congressional initiative to expand and deepen trade and investment links between the U.S. and sub-Saharan Africa.
Friday, August 21st is reserved for meetings and a luncheon with the Congressional Delegation and Trade and Business Representatives from:
Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.
Attendance at this event is by invitation only, consisting of a pre-selected group of regional and international industry leaders. Should you be interested in participating, please contact: David Altman Tel: +1 212.904.0248 davidaltman@usexportcouncil.com
Co-organized and Sponsored by:
Business Council for International Understanding
Mark Clack Senior Advisor, KRL International LLC Tel 202.223.1101 mark@krlinternational.com
Johnny Brown Senior Advisor US Export Council
Travel Packages including flights and accommodation are available. Upon confirmation of your attendance, kindly contact Daniel Bloch at Omega Investment Research on +27 (0)21 689 7881 or email: danielb@omegainvest.co.za
Link to the Invitation http://www.omegainvest.co.za/USConference.html
Monday, May 25, 2009
High-Level Engagement with Africa Has Started
Washington — “High-level engagement has already started” between the Obama administration and Africa, Assistant Secretary of State for African Affairs Johnnie Carson said May 19.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Speaking at a gala reception in Washington marking the beginning of “Africa Week,” Carson said: “Most of the Obama administration’s Africa team is in place, and we are gearing up. We will continue to build on and strengthen the strong bipartisan consensus in Congress and among the people of America that has motivated U.S. policy towards Africa.”
“Over the next four years, we will be focusing our efforts on strengthening democracy, promoting sustainable development, resolving or mitigating conflict, and dealing with transnational issues such as climate change and agriculture,” he pledged.
Additionally, he said, President Obama was expected to meet shortly with Tanzanian President Jakaya Kikwete at the White House. “Secretary Clinton will be meeting with the Angolan minister of foreign affairs, Assunção Afonso dos Anjos. She has already met with her Nigerian and South African counterparts. And in July,” Carson said, “the president will be making his first trip to Africa in his current capacity, when he travels to Ghana.”
Earlier that same day, Carson told his audience, on the 16th anniversary of U.S.-Angolan bilateral relations, United States Trade Representative Ron Kirk signed the U.S.-Angolan Trade and Investment Framework Agreement with Angolan Minister dos Anjos.
Carson said, “It is anticipated that Secretary Clinton will be traveling to Kenya to participate in the African Growth and Opportunity Act [AGOA] Forum in early August, and possibly visit other countries as well.”
Speaking to a capacity crowd made up of African ambassadors, business executives, Africanists and well-wishers, Carson reminded his audience that “Africa has played and continues to play a major role in the life of the United States and today is one of America’s most important friends and global partners.
“The ties that bind the United States and Africa are stronger and more enduring today than they have ever been,” he said. Those ties, he added, “extend from the shores of West Africa, where freed American slaves founded the proud state of Liberia, to the White House, where President Barack Obama, the son of a Kenyan father, is now serving as president of this country.”
The links that connect Africa and the United States, he said, are built on a “rock-solid foundation.” He reminded everyone that more than 13 percent of America’s population is of African descent and that that number continues to grow because of immigration laws that have opened the door to a new generation of African immigrants.
“Across the African continent, the trans-Atlantic connections and strong feelings of friendship and good will are kept alive by thousands of African professionals, political leaders and government workers who have been able over the years to travel to the United States to attend our many colleges and universities,” he said.
Volunteer opportunities like the Peace Corps, which sends thousands of Americans to Africa each year, and education opportunities like the Fulbright Program and Humphrey Scholarships, which bring hundreds of Africans to the United States, guarantee that the links that connect Africa and the United States will remain strong well into the future — and may even generate another president of the United States.
Turning to democracy, Carson said, “Africans have always shared U.S. values and principles about democracy, and African governments are in the process of consolidating the democratic gains of the recent past.”
In January 2009, Carson noted, Ghana saw its fourth successful election and second peaceful transfer of power from one party to another, and in South Africa, the election in April of President Jacob Zuma marked the fourth successful election since the end of the apartheid era.
“Ghana’s and South Africa’s elections are two of the most recent marquee events showcasing the winds of change that have swept the continent,” he said, “but they are far from the only ones. The elections also demonstrate that democracy is not a one-time event, but a process.”
America’s ties with Africa are also based on a strong strategic and economic foundation, Carson said. “Today, approximately 17 percent of America’s oil imports come from Africa, with Nigeria supplying some 8 percent of America’s needs, followed by major imports from Angola, Algeria and Equatorial Guinea.”
Nigeria, Angola and Algeria provide 98 percent of liquefied natural gas imports into the eastern United States, he noted.
“In the months to come,” Carson told his audience, “I look forward to getting reacquainted with those of you that I already know, and to meeting for the first time those I have not yet had the pleasure of meeting. Please again accept my congratulations for a successful Africa Week 2009.”
Read more: "High-Level Engagement with Africa Has Started" - http://www.america.gov/st/texttrans-english/2009/May/20090522120551WCyeroC0.9289929.html?CP.rss=true#ixzz0GUQjRrtV&A
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Thursday, May 21, 2009
Increasing American investments into Africa - US study
American corporations are becoming increasingly interested in investing in Africa, with some regarding it as the last big growth market, but they are often deterred by Africa's negative image, a new study shows.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
The study, released on 19 May 2009 in Washington, identified the technology sector as an important US investment opportunity outside of Africa's traditional natural resources and agricultural sectors. It also highlighted education as one of the major improvements US executives believe would make Africa a more attractive investment destination.
However, Africa needs to market itself much more aggressively as well as making internal improvements. While Chinese and, to a lesser extent, European corporations are increasing their African investment, US executives often see other geographical areas as offering better returns or less risk.
The study was conducted by the Africa Business Initiative of the US Chamber of Commerce in Washington DC, and Baird's CMC, an international communication management consultancy which conducted all of the interviews.
The conclusions and recommendations are based on in-depth interviews with executives from 30 US multi-national corporations, of which half are Fortune 100 companies. The objective was to identify the factors affecting US corporations' investment decisions in Africa and what US executives believe would make Africa more attractive to them.
A second part of the study will encompass the response by African leaders to these corporate investment attitudes.
"The study aims to contribute to the economic ties between the USA and Africa," said François Baird, Baird's CMC co-chairman.
"We want to tap in to the 'conversation behind closed doors', both in US boardrooms and in African cabinet discussions. We hope that these frank viewpoints by US business leaders and African policy-makers will help increase American investment into Africa."
According to economist Christo Luus, Africa's share of foreign investment has declined since the 1970s, when it attracted 5.4% of global foreign investment, only slightly less than Asia's 6.4% despite Asia's larger population and economic activity. Since the 1980s, foreign investment flows to Africa have averaged only 2.2% of the global total, while Asia's share increased to 17.3% of global foreign investments.
Africa's poor reputation among US businesses, bolstered by a flow of negative news from the continent, is the primary reason that US investment goes to other continents. Africa is often compared unfavourably to the BRIC countries - Brazil, Russia, India and China.
There is a perception that investing in Africa requires too much trouble for too little return, and that other destinations offer similar or better returns with far less risk.
Hence the study's recommendation that Africa promote itself to investors on a regional basis and seek to overcome the continent's image problem by attracting small investments and ensuring a positive experience for the company concerned. Larger investments would follow.
"The most powerful investment incentive seems to be a positive experience for the executive or company. When the experience is good, they go back for more. Of course, the opposite is also true."
The study highlighted the five most common questions US executives ask when considering investment in a foreign country. They are:
"Africa does not yet answer these questions satisfactorily," Baird said.
"Unfortunately there is a strong consensus among the respondents that the image of Africa suggests that the rule of law may not prevail to the degree required to make Africa an attractive investment destination."
The perception of corruption, seen as applying to the whole continent, is a major factor in US considerations, with one executive noting that US business is "terrified" of contravening the US Foreign Corrupt Practices Act.
"The image of lawlessness, corruption, unstable governments, inadequate infrastructure, uneducated or undertrained manpower and an unwelcoming attitude towards business deters US businesses from investing in Africa," the report said.
There is also a view that Africa does not yet offer a large middle class of consumers, nor does it show consistent economic growth that would promise a future market. On the positive side are Africa's enormous natural resources, which do attract investors.
Illustrating the issue of a country actively seeking investment, Baird recounted the comments of an American executive about Nigeria, where the Nigerian president regularly hosts meetings with companies and his cabinet ministers.
"We discuss problems and cabinet ministers must explain immediately what can be done. At the next meeting the president wants to know if it happened to our satisfaction. Things happen. It shows us that Nigeria really wants foreign investors," the US executive said.
The study concluded that the main reasons why Africa has not yet become a top investment priority for corporate America are that US executives do not believe the risks involved are commensurate with the promised return, that other countries and regions offer better investment options and that US executives see Africa as needing too much effort to be attractive at the moment.
Nevertheless, Africa is the second largest and second most populous continent after Asia, with 20% of the world's land area and 14% of global population.
US business see pockets of great potential in Africa, and top executives generally have an understanding of the continent and its different regions. They are seriously examining African investment opportunities.
US companies in some sectors, particularly technology companies, now regard Africa as "the last frontier for growth". It has a market of one billion people, mobile telephone networks have been successful, and other countries, particularly China, are increasing their African investment thrust.
Corporate America would be more interested in the countries that are seriously trying to attract investment if these countries - preferably as regions - acted on the key requirements," the study concluded. These requirements are:
Commenting that attracting US investment is "a long haul", the study recommended that African countries and regions sell themselves aggressively to corporate America which needs "a strong and specific pull from Africa".
It also noted the suggestion that perhaps one major entity needs to take on the cause of selling Africa to the developed world.
However, Africa needs to market itself much more aggressively as well as making internal improvements. While Chinese and, to a lesser extent, European corporations are increasing their African investment, US executives often see other geographical areas as offering better returns or less risk.
The study was conducted by the Africa Business Initiative of the US Chamber of Commerce in Washington DC, and Baird's CMC, an international communication management consultancy which conducted all of the interviews.
The conclusions and recommendations are based on in-depth interviews with executives from 30 US multi-national corporations, of which half are Fortune 100 companies. The objective was to identify the factors affecting US corporations' investment decisions in Africa and what US executives believe would make Africa more attractive to them.
A second part of the study will encompass the response by African leaders to these corporate investment attitudes.
"The study aims to contribute to the economic ties between the USA and Africa," said François Baird, Baird's CMC co-chairman.
"We want to tap in to the 'conversation behind closed doors', both in US boardrooms and in African cabinet discussions. We hope that these frank viewpoints by US business leaders and African policy-makers will help increase American investment into Africa."
According to economist Christo Luus, Africa's share of foreign investment has declined since the 1970s, when it attracted 5.4% of global foreign investment, only slightly less than Asia's 6.4% despite Asia's larger population and economic activity. Since the 1980s, foreign investment flows to Africa have averaged only 2.2% of the global total, while Asia's share increased to 17.3% of global foreign investments.
Africa's poor reputation among US businesses, bolstered by a flow of negative news from the continent, is the primary reason that US investment goes to other continents. Africa is often compared unfavourably to the BRIC countries - Brazil, Russia, India and China.
There is a perception that investing in Africa requires too much trouble for too little return, and that other destinations offer similar or better returns with far less risk.
Hence the study's recommendation that Africa promote itself to investors on a regional basis and seek to overcome the continent's image problem by attracting small investments and ensuring a positive experience for the company concerned. Larger investments would follow.
"The most powerful investment incentive seems to be a positive experience for the executive or company. When the experience is good, they go back for more. Of course, the opposite is also true."
The study highlighted the five most common questions US executives ask when considering investment in a foreign country. They are:
- Is there stability and order as I know it?
- Is the opportunity large enough to justify the investment?
- What is the trade-off between risk and reward?
- Does the country have an efficient business framework?
- Does the country really want the investment?
"Africa does not yet answer these questions satisfactorily," Baird said.
"Unfortunately there is a strong consensus among the respondents that the image of Africa suggests that the rule of law may not prevail to the degree required to make Africa an attractive investment destination."
The perception of corruption, seen as applying to the whole continent, is a major factor in US considerations, with one executive noting that US business is "terrified" of contravening the US Foreign Corrupt Practices Act.
"The image of lawlessness, corruption, unstable governments, inadequate infrastructure, uneducated or undertrained manpower and an unwelcoming attitude towards business deters US businesses from investing in Africa," the report said.
There is also a view that Africa does not yet offer a large middle class of consumers, nor does it show consistent economic growth that would promise a future market. On the positive side are Africa's enormous natural resources, which do attract investors.
Illustrating the issue of a country actively seeking investment, Baird recounted the comments of an American executive about Nigeria, where the Nigerian president regularly hosts meetings with companies and his cabinet ministers.
"We discuss problems and cabinet ministers must explain immediately what can be done. At the next meeting the president wants to know if it happened to our satisfaction. Things happen. It shows us that Nigeria really wants foreign investors," the US executive said.
The study concluded that the main reasons why Africa has not yet become a top investment priority for corporate America are that US executives do not believe the risks involved are commensurate with the promised return, that other countries and regions offer better investment options and that US executives see Africa as needing too much effort to be attractive at the moment.
Nevertheless, Africa is the second largest and second most populous continent after Asia, with 20% of the world's land area and 14% of global population.
US business see pockets of great potential in Africa, and top executives generally have an understanding of the continent and its different regions. They are seriously examining African investment opportunities.
US companies in some sectors, particularly technology companies, now regard Africa as "the last frontier for growth". It has a market of one billion people, mobile telephone networks have been successful, and other countries, particularly China, are increasing their African investment thrust.
Corporate America would be more interested in the countries that are seriously trying to attract investment if these countries - preferably as regions - acted on the key requirements," the study concluded. These requirements are:
- An educated and healthy populace
- A stable political environment
- Reduced corruption
- A fair, conducive business environment
- Improved infrastructure
Commenting that attracting US investment is "a long haul", the study recommended that African countries and regions sell themselves aggressively to corporate America which needs "a strong and specific pull from Africa".
It also noted the suggestion that perhaps one major entity needs to take on the cause of selling Africa to the developed world.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Tuesday, May 12, 2009
African Partnership for Economic Growth Caucus
On the eve of the bi-annual meeting of the World Bank and International Monetary Fund Bi-Annual General Assembly in Washington, D.C., U. S. Rep. Bobby L. Rush (IL-01) hosted two, high profile meetings of foreign dignitaries, trade representatives and top U.S. elected and appointed officials to mark the launch of the African Partnership for Economic Growth Caucus (APEGc), a group that Rush spearheaded in forming in partnership with U. S. Rep. Donald Payne (NJ-10).
The day began with Rush providing welcoming remarks at a morning gathering that featured a sterling array of African and American diplomats and business leaders, including His Excellency Namadi Sambo, Executive Governor of Kaduna State, Nigeria. Rush, who chairs the Committee on Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection, began his remarks with these words, "I am very passionate about seizing this unique moment in history to do all we can to link the economic interests of the United States and Africa. I take seriously the 'trade' mandate of the subcommittee I chair and I want to bring that work into focus in a way that makes a difference in the lives of the people of the United States and, especially, on behalf of the people I serve in my Chicago district," said Rush.
The morning event, hosted by a coalition of national trade organizations convened by Ufo Eric-Atuanya of Rimsom Associates, marked the beginning of a working group on African trade. Their goal, in part, is to ensure that leaders and entrepreneurs from the continent of Africa have their voices heard on a variety of economic policy issues as part of the unfolding trade and economic policy agenda between the United States and Africa.
Later that evening, in a capacity crowd in the U. S. Capitol Visitor Center attended by U. S. Trade Representative Ron Kirk, Rush was the featured speaker at a reception hosted by the Business Council for International Understanding, a leading international trade association committed to fostering and strengthening ties between U. S. business and international markets. In brief, but lively remarks, Rush said this, "Through the course of last year's presidential campaign, a clarion cry went forth that said, 'yes we can.' I stand before you this evening determined to take that statement to the next level by saying, 'now we must!'
"I've got enormous jurisdiction on international trade but it's never really been utilized. Rather than being a back bencher, with vim and vigor I have decided to develop an international trade initiative. It's not our intention to try to initiate bilateral or multi-lateral agreements. That falls under the jurisdiction of the Ways and Means Committee.
"But we can be involved in international trade promotion. I really believe that if, in fact, we can develop a common agenda with respect to U. S. trade with Africa, then it can be mutually beneficial. My district is one of the poorest in the nation. If I'm going to deliver effectively on job creation, then I've got to look beyond the borders of the United States. I want the citizens of my district to understand that they are, in fact, citizens of the world. That's what I want to promote.
"I am so pleased that all of you are here, this evening, taking the position that Africa has real specific issues that will not get discussed or moved to the front of the agenda unless we are part of the solution for that discussion. I believe that as Africa improves itself politically and economically, I believe that the littlest children can take their place as leaders of the entire world."
# # #
(WASHINGTON, Apr. 23, 2009) - Rush addresses a morning session on trade policy between the U. S. and Africa at a forum at the Ronald Reagan Building and International Trade Center in Washington, D.C. Shown, here, left to right, is Rush trade counsel Angelle Kwemo; Claude Fontheim, Senior Advisor, Business Council for Global Development ; His Excellency Namadi Sambo Executive Governor, Kaduna State, Nigeria; Ufo Eric-Atuanya, Managing Partner, Rimson Associates and Dr. Willene Johnson, President, Komanza, Inc. and former U. S. Executive Director for the African Development Bank.
(WASHINGTON, Apr. 23, 2009) - Rush greets United States Trade Representative Ron Kirk at an evening reception at the U. S. Capitol Visitor Center that marked the launch of the African Partnership for Economic Empowerment Caucus (APEEC), a group launched by Rep. Rush and U. S. Rep. Donald Payne (D-NJ).
At Capitol Hill reception with U. S. Trade Representative Ron Kirk, Rush said "now is the time to develop a common agenda on U. S. trade with Africa."
WASHINGTON, Apr. 23, 2009) – After Rush spoke to invited guests at the evening reception in the Visitor Center, Peter Tichansky, President and CEO of the Business Council for International Understanding, the host of the evening event, invited him back to the podium where they engaged in dialogue about how to strengthen the economic ties between the United States and Africa.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Wednesday, May 6, 2009
African response to the global economic crisis – fiscal policy.
Colin McCarthy, a Tralac Associate, comments on an African response to the global economic crisis – fiscal policy.
In an earlier Hot Seat Comment (This, too, will pass) the question was raised of what African countries and their policy makers could do while waiting for a revival of world-wide economic growth. It is increasingly becoming clear that the global economic recession will be with us for some time, with all the talk about observed green shoots being declines in rates of decline in production and unemployment growth.
How should African governments react to this situation? In this first Comment in a series that will address this question the focus falls on discretionary fiscal policy.
Any Economics 101 student can explain that if a deflationary gap develops in an economy the remedy advocated by John Maynard Keynes is to raise government expenditure. The current crisis has brought about a revival of Keynesian thought with the governments of the large industrialised economies reverting to serious fiscal intervention. How the impact of the dramatic growth in public debt will evolve in the longer run is a serious issue but for our purposes the immediate question is whether the typical African country can also resort to similar policies to boost ailing production and alleviate growing poverty. The simple answer is ‘no’, at least not in an unqualified way.
It is difficult to identify the ‘typical’ African country. All African economies can be classified as developing countries but within this broad category the degree of heterogeneity is remarkable. The first point to mention, therefore, is that designing an appropriate policy reaction should not be like buying socks, that is, ‘one size fits all’. The fiscal policy options available to, for example, Burundi will differ widely from those available to South Africa, and responsible fiscal policy should reflect these differences.
However, within the category of developing countries Sub-Saharan African economies dominate the group that the UN defines as least developed countries (LDCs). These economies have very circumscribed capacities to use discretionary fiscal policies. By and large their tax bases are very restricted with low contributions of personal and corporate income tax revenue. Furthermore, they usually have underdeveloped financial markets which cannot fund government deficit spending through purchases in the capital market of government bonds. Should these countries grow their deficits, these, in the absence of increased foreign aid, are likely to be monetized. This means that money is created by the central bank to fund government spending.
The outcome of reverting to the money printing press in funding government deficits is escalating inflation. Higher inflation is an insidious form of taxation and it is very likely that this transfer of resources from consumers to the state as an outcome of discretionary fiscal policy will not serve the welfare of society. For the poorest economies, therefore, an increase in government spending in response to recessionary conditions will require an increase in budget assistance through more aid. ‘Trade and not aid’ as slogan in the developed world will have to be replaced by ‘aid in the absence of trade’.
Shifting attention from the funding of increased government expenditure to the nature of this spending, the need in all African economies to carefully plan and commit spending becomes of paramount importance. At least three questions should be considered in designing spending programmes. The first is whether the increase in spending will reach and benefit those whose welfare positions have become most vulnerable because of the global recession and its domestic impact. The second is whether existing and best-managed programmes can be expanded, rather than reverting to new and untried ones. Doing this allows the utilisation of existing capacities and is less likely to waste scarce resources. A third question is whether the spending can expand the production capacity of the economy.
Aiming to increase the production capacity of the economy through an increase in government spending is very important because if productivity is not increased a return to normal economic conditions will require a scaling down of government expenditure. In all economies, but in poorer countries in particular, this creates immense social and political problems. Government spending tends to be very flexible when it comes to increases but is notoriously inflexible when it needs to be cut back.
http://www.tralac.org
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
In an earlier Hot Seat Comment (This, too, will pass) the question was raised of what African countries and their policy makers could do while waiting for a revival of world-wide economic growth. It is increasingly becoming clear that the global economic recession will be with us for some time, with all the talk about observed green shoots being declines in rates of decline in production and unemployment growth.
How should African governments react to this situation? In this first Comment in a series that will address this question the focus falls on discretionary fiscal policy.
Any Economics 101 student can explain that if a deflationary gap develops in an economy the remedy advocated by John Maynard Keynes is to raise government expenditure. The current crisis has brought about a revival of Keynesian thought with the governments of the large industrialised economies reverting to serious fiscal intervention. How the impact of the dramatic growth in public debt will evolve in the longer run is a serious issue but for our purposes the immediate question is whether the typical African country can also resort to similar policies to boost ailing production and alleviate growing poverty. The simple answer is ‘no’, at least not in an unqualified way.
It is difficult to identify the ‘typical’ African country. All African economies can be classified as developing countries but within this broad category the degree of heterogeneity is remarkable. The first point to mention, therefore, is that designing an appropriate policy reaction should not be like buying socks, that is, ‘one size fits all’. The fiscal policy options available to, for example, Burundi will differ widely from those available to South Africa, and responsible fiscal policy should reflect these differences.
However, within the category of developing countries Sub-Saharan African economies dominate the group that the UN defines as least developed countries (LDCs). These economies have very circumscribed capacities to use discretionary fiscal policies. By and large their tax bases are very restricted with low contributions of personal and corporate income tax revenue. Furthermore, they usually have underdeveloped financial markets which cannot fund government deficit spending through purchases in the capital market of government bonds. Should these countries grow their deficits, these, in the absence of increased foreign aid, are likely to be monetized. This means that money is created by the central bank to fund government spending.
The outcome of reverting to the money printing press in funding government deficits is escalating inflation. Higher inflation is an insidious form of taxation and it is very likely that this transfer of resources from consumers to the state as an outcome of discretionary fiscal policy will not serve the welfare of society. For the poorest economies, therefore, an increase in government spending in response to recessionary conditions will require an increase in budget assistance through more aid. ‘Trade and not aid’ as slogan in the developed world will have to be replaced by ‘aid in the absence of trade’.
Shifting attention from the funding of increased government expenditure to the nature of this spending, the need in all African economies to carefully plan and commit spending becomes of paramount importance. At least three questions should be considered in designing spending programmes. The first is whether the increase in spending will reach and benefit those whose welfare positions have become most vulnerable because of the global recession and its domestic impact. The second is whether existing and best-managed programmes can be expanded, rather than reverting to new and untried ones. Doing this allows the utilisation of existing capacities and is less likely to waste scarce resources. A third question is whether the spending can expand the production capacity of the economy.
Aiming to increase the production capacity of the economy through an increase in government spending is very important because if productivity is not increased a return to normal economic conditions will require a scaling down of government expenditure. In all economies, but in poorer countries in particular, this creates immense social and political problems. Government spending tends to be very flexible when it comes to increases but is notoriously inflexible when it needs to be cut back.
http://www.tralac.org
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Friday, May 1, 2009
Obama Graded on African Policy Initiatives After 100 Days in Office
November 4th, 2009 marked a great milestone in American history and the history of people of African descent. For the first time in the history of mankind, a junior senator of African heritage got elected to the office of the President of the United States of America. It was a moment of jubilation and thrill…the euphoria was felt around the world. Millions wept out of happiness and for witnessing the unimagined prospect of an African-American president in a once the most racist nation on earth.
That great ecstasy was deeply felt in Africa more than any other place outside the United States. A young senator, whom many in Africa referred to as a native son, won the highest trophy ever imaginable. From the streets of Kogelo - Obama’s ancestral village, to the Cape of Good Hope in South Africa and anywhere in between, the jubilation was rampant.
Just like the triumph, expectations for a favorable American policy towards Africa were high in the air. Even African dictators, ironically the very people who have denied freedom to Africans and condemned them to a miserable life by failing to tackle or exacerbating the issues of corruption, mismanagement, environmental degradation, mal-governance, abuse of power, conflict, poverty and what not, praised Obama’s historic victory one after another. The worst of African dictators jumped on the bandwagon glorifying and praising Obama’s victory as historic and momentous. Here are few such praises from African leaders[i];
Mr. Moi Kibaki, President of Kenya described Obama´s victory as a “momentous occasion for Kenya…it is our own victory because of his roots here in Kenya… as a country, we are full of pride for his success…your victory is not only an inspiration to millions of people all over the world, but it has special resonance with us here in Kenya.”
Nigerian President Oumaru Yar´Adua…”the election of Barack Obama … has finally broken the greatest barrier of prejudice in human history. I believe for us in Nigeria, we have a lesson to draw from this historic event…that the election of Obama had “created a totally and completely new era.”
Denis Sassou Nguesso described Obama´s victory as a “…moving historic moment…we see how visionaries like Martin Luther King saw coming events. His dream has come true.”
Chad’s National Assembly Leader; Nasser Guelindoksia agreed that Obama´s victory “…is an example to follow, especially by Africans as Americans show that democracy knows no color, religion or origin.”
Somalia’s former President of the Transitional Somali Government, Abdullahi Yusuf Ahmed defined Obama´s victory as “…a great moment for America and for Africa…I am hopeful that he (President Obama) will help end the major crisis in the world, particularly the endless conflict in my country.”
Sudanese President Omer Hassan Al-Beshir noted “…we would hope that the slogan of President Obama – change – would be reflected in the foreign policy of the United States…we would like to see some real change between Sudan and the United States.”
South African President Kgalema Motlanthe expressed “…your election…carries with it hopes for millions of your country men and women as much as it is for millions of people of … African descent.”
Robert Mugabe of Zimbabwe wrote “…as the government and people of Zimbabwe join you in celebrating this event in the history of the U.S.A, I take this opportunity to assure you Mr. President-elect that the Government of the Republic of Zimbabwe remains ready to engage your government in any desirable endeavor to improve our bilateral relations”.
During his rigorous campaign season, Obama vowed to change American policy towards Africa. Among other things, Obama called on “Ethiopia and Eritrea to walk back from the brink of war which seemed unavoidable at the time…called for an increased pressure on Robert Mugabe to follow through with power-sharing agreement…promised to end the genocide in Darfur…pledged to formulate a new approach to the deteriorating situation in Somalia…strengthen Africom to promote peace, security, and stability on the continent”[ii].
Obama raised the bar even higher in his inaugural speech when he declared “to those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist…to all those watching tonight (January 20, 2009) from beyond our shores, from parliaments and palaces …huddled around radios in the forgotten corners of our world - our stories are singular, but our destiny is shared, and a new dawn of American leadership is at hand…those who seek peace and security - we support you”[iii].
Today, after 100 full days in office, Obama got an A or B on most of the things he has accomplished so far and for keeping most of his campaign promises. In his own words Obama acknowledged that he is “pleased with what has been accomplished so far, but we have got a lot of work to do”. Most commentators/journalists based their grading on wide range of issues but notably on the economy, transition into power, hiring scrambles, Afghanistan and Pakistan, Environment, Women Rights, Healthcare, Transparency and Accountability, Bipartisanship, the Closure of Guantanamo Prison and etc.
I wanted to look at what Obama folks have accomplished the African policy conundrum in their first hundred days in office. Practically, nothing. I am not aware of any major campaigns by the African Diaspora or African interest groups with the exception of Save Darfur Coalition that had an agenda for the President in an effort to hit the ground running. Rather a whole host of expectations that the Obama people would be favorable in their approach towards African issues; Hunger, Poverty, HIV, corruption, democracy, regional Peace and Stability etc that are not addressed. There is no doubt that the financial meltdown and the many challenges Obama has inherited from his predecessor has overshadowed his African and other policy initiatives [IV]. But it seems to me that the no-drama Obama team could have done a lot better if they moved “swiftly and quickly” as they have promised us - the enthusiastic supporters.
The visit of Senator John Kerry to Sudan and U.S. Rep. Donald Payne - chairman of the Africa subcommittee on the House Foreign Affairs Committee, to Mogadishu and the dramatic saga of Somali Pirates were among the few major African news makers involving the current U.S Administration[v].
John Kerry’s visit to Khartoum pushed the Sudanese government to agree to allow some of the expelled humanitarian and aid agencies back to Darfur. The piracy incident was hailed by many as Obama’s first national security test that he proficiently passed. There were also reports that the Obama administration is rethinking its Somalia strategy and Defense Secretary Robert Gates went as far as stating “…the ultimate solution for piracy is on land… there is no purely military solution to it…” and the instability and lawlessness in Somalia is key to the problem.
Whereas the insurgents fired mortar at Representative Payne’s plane, there was little coverage of the purpose and result of the visit. But the congressman stated that “…the policy of constructive engagement [is] where you deal with the government, and let them deal with their internal problem” is essential to curbing piracy off the Somali coast. He added “…the Somali government doesn’t want Americans to come run any nation-building programs…they want technical assistance…they need financial support, and they’ll take care of it for themselves”[vi].
Very few journalists/pundits considered African Policy in their grade report/card. Bruce A. Dixon for the Black Agenda Report, one of the few people I have seen grading the President on African policy, gave him one out of five [vii]. I do not know if there are major initiatives in the works for Obama’s African policy. I sincerely hope so. But based on the selection of Ambassador Jonny Carson, a career diplomat noted for a track record of working in Africa, as Assistant Secretary State for African Affairs, I give the President a passing grade with an optimism that the administration will soon move “swiftly” to act on some of the pressing African issues and fulfill Obama’s campaign promises. It should also be noted here that Obama has followed through with his campaign promise to double overseas USAID which will be valuable in achieving the so called “Millennium Development Goals”. Of course only if African leaders can use it for intended, and most of the time unintended, purposes [viii].
American foreign policy on Africa usually focused disproportionately on short-term stability by embracing dictators. The Bush administration went even farther by subordinating the promotion of human rights, democracy and the rule of law to terrorism concerns, a practice very much reminiscent of cold-war tactics, and thereby alienated the vast majority of freedom seeking Africans. In a recent article Jason McLure of the Newsweek detailed how cunning and enterprising African leaders like Meles Zenawi of Ethiopia used US concerns about terrorism not only to silence his domestic political opposition but also wage a costly war on another already battered and failed African state, Somalia, with huge humanitarian, financial and political cost. After 100 days in office Obama did not even indicate if he would make a departure from this approach that failed both Africans and Americans or continue with it with a slight twist by default.
In short, it remains to be seen if the Obama Administration’s policies will match the rhetoric, the great expectations and the universal goodwill that the President enjoys! Africans of all walks of life are looking up to him to deliver them from repression, war, poverty and HIV/Aids.
Ultimately it is up to Africans not Obama, to fix Africa’s mess. But a just, foresighted and generous hand of a powerful President of the powerful won’t hurt.By Oromsis Adula, The Horn of Africa
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