Sipho and I attended the opening reception of the 2011 African Growth and Opportunity Act Forum last evening. It coincided with the launch of the International Trade Exhibition, which intends to show off African-made goods and services in order to facilitate business opportunities, both within Africa and between the US.
The opening reception, which was attended and officiated by the Vice President of Zambia, Honorable George Kunda, was a fantastic opportunity to meet folks from a variety of businesses and sectors. I was quite impressed with the diversity of interests represented, from private sector to government to civil society organizations like ONE.
I had the huge honor of interviewing Ambassador Demetrios Marantis for our Trade = Development blog series. He plays a leading role in enforcing the African Growth and Opportunity Act (AGOA), a US legislation to help assist the economies of sub-Saharan Africa, and his passion for his work is infectious. Read our conversation to find out how trade affects President Obama’s development strategy, why ONE members should care about trade and what’s next for AGOA.
So, I need to start off with a dumb question. What is AGOA and why do you think it is important tool for development?
Here’s why AGOA rocks. It rocks because it provides trade to enhance development. And what’s so interesting is that it helps real people create jobs for real people. It opens the US market basically entirely for African exports of essentially everything that Africa produces. And it allows men and women who otherwise wouldn’t have a job to make a product and send it to the US.
Today kicks off our new blog series, Trade = Development. Follow along to learn how African exports to the US are helping to improve the lives of thousands of African producers. In this piece, Tom Hart discusses the importance of AGOA.
Next week, ONE will be in Zambia, along with Secretary Hillary Clinton, talking about the importance of US-Africa trade. Did you know the US imports more than $50 billion in oil from Africa each year…more than five times what we give in aid? Or that current US trade policy has helped create around 300,000 jobs in Africa, mostly for women working in the textile industry? Trade is a crucial tool in Africa’s effort to develop economies and escape the grinding poverty that impacts so many on the continent.
Feelings of positivity were practically oozing from the World Economic Forum (WEF) on Africa in Cape Town for all three days of the conference. The opinion was that Africa’s time had come, and the delegates were very happy about that.
With economic growth forecast above the global average at 5.5 percent, an expanding number of middle class consumers, large quantities of natural resource wealth, an even larger workforce and an increasing number of new investors, Africa appears like a very attractive place for new business.
In January, I wrote a blog post on the World Economic Forum’s annual meeting in Davos. In the post, I argued that the world has started to notice Africa’s huge economic growth potential.
The International Monetary Fund has now delivered a further upbeat assessment of Africa’s growth potential in its 2011 World Economic Outlook Report published earlier this month. The report states that after having grown by only 2.8 percent in 2009 and 5 percent in 2010, sub-Saharan Africa (SSA) economies are expected to grow by 5.5 percent in 2011 and 5.9 percent in 2012.
The report goes on to say that in a regional ranking, SSA comes second only to Asia. SSA’s economic growth is projected to be higher than Middle East and North Africa, Latin America and the Caribbean, Central and Eastern Europe and Commonwealth of Independent States.
To prevent high food prices from going higher, experts from the World Bank to the US Department of Agriculture (located only a few blocks away from one another), continue to chant the mantra “free trade policy will solve high prices.” The benefit of refraining from export bans seems to make sense to me since they keep more food on the world markets, thus lowering prices some, although I understand why an exporting government might want one. However, I question some of the experts’ views on whether lowering import tariffs and taxes will protect the world’s poorest.
Tinkering with agricultural markets is a dangerous business, especially when prices are skyrocketing and more and more people are going hungry. Hastily devised export bans, subsidy programs or regulation of commodities trading, however well intended, can make things worse. Many experts believe this to be the case with past food crises in the early 1970s and 2008, when governments took measures to seal off domestic markets at immense international cost.
This was one of the lessons from Wednesday’s roundtable discussion on the Hill “Price Shocks and Global Instability”, which was organized by ONE along with several other development and advocacy organizations.
“We must make sure that the cure is not worse than the disease”, explained Allan Jury, director of the UN World Food Program’s US Relations Office. Jury described the WFP’s five point strategy for coping with high food prices, which includes a strong focus on social safety nets to ensure that the poorest people have enough to eat, as well as the promotion of smallholder and women farmers to build resilience in the long term.
“Lessons have been learned from the 2008 crisis”, noted USAID’s Susan Bradley, who explained that the government’s Feed The Future program has a regional focus to improve transparency and grain transport in times of low supply.
Perhaps, then, we should be confident that donor countries will be able to cushion the most vulnerable from spiking prices this time around?
Not if they can’t afford to. Rising food prices means the cost of food assistance aid has shot up, with food aid costing the US government 20% more than before prices rose. The World Food Program’s food aid scheme is costing $200m more because of high prices.
At the same time, legislators in the US are threatening to cut food and agricultural aid by up to 40%, a double sucker punch to millions of empty stomachs around the world who would see their short term lifelines and their long term projects taken away.
This may sound like a moral issue, but it is also a self-interested one. Wendy Chamberlain, head of the Middle East Institute, discussed her experiences in Pakistan, where food security was a crucial way to prevent recruitment of desperate rural people by terrorist organizations. She pointed to a recent study which found that food aid provided by Americans after a 2005 earthquake led to higher levels of respect for Americans for years to come. An expert in attendance from the State Department confirmed the diplomatic importance of agricultural assistance, especially when it involves American companies as Feed the Future does through its Office of the Private Sector and Innovation.
As we draw ever closer to finding the right formula for short term humanitarian relief and long term agricultural investment, it would be wrong (and dangerous) to withdraw these programs from the world’s neediest people.
ONE is campaigning to ensure that the Congressional budget does not cut foreign assistance programs like Feed the Future that help people break the cycle of poverty and hunger.
The Horn of Africa is experiencing its worst drought in 60 years. More than 11 million people, mostly nomadic pastoralists and farmers in south-central Somalia, north-eastern Kenya, and south-eastern Ethiopia, are severely lacking access to food.
2011 marks 30 years since the first cases of AIDS were documented. Take a closer look at the specific, achievable goals we must hit by 2015 to make this year the beginning of the end of AIDS.
As aid agencies warn more than 9 million people could be affected by a food crisis in East Africa, world leaders are failing to keep their 2009 promises to tackle the causes of chronic hunger and support farmers in the world's poorest countries.
