By now, it's no secret that the United States needs to pick up the pace in the global economy. With other countries, particularly China and India, producing more highly skilled people and experiencing faster economic growth than ever before, Americans all across the political spectrum have been calling for increases in overall competitiveness. Certainly, if growth and trade do not become main focal points in the next few years, the U.S. could start to see its position as the economic superpower disappear. It is important to continue to participate in the global market, and especially to become a known financial presence in rapidly growing economies. But, would anyone believe that some of America's biggest missed opportunities are in Africa?
A recent article in Foreign Affairs pointed out this phenomenon, discussing in detail President Obama's recent "failings" across the continent. Frankly, I was quite surprised at the claims the author makes about African countries' burgeoning growth and increasing significance to the U.S. For a part of the world which, to the Western world, is continually marked by unending civil wars, impoverished people, and countless dollars of foreign aid, it is rather unbelievable that it could present one of the most promising areas of global economic opportunity. Perhaps it is precisely this misunderstanding and off-base characterization of Africa that has led to the U.S. turning a blind eye to potential new trading partners. As globalization takes hold of each country in the international system--both developed and developing--Americans must cease to see Africa as a mere disease-ridden, politically corrupt, economically-troubled backwater of the world. If this mindset does not change with haste, other big powers within the economic system will gain a significant competitive edge.
Today, Africa is home to six out of the ten fastest-growing economies in the world. Moreover, democracy and free market economics have begun to spread throughout the continent, and about fifteen African countries are slated to hold elections this year. As author Todd Moss notes, "With their combination of liberal politics and market economics,
countries such as Ghana and Botswana are attracting frontier investors.
Huge potential markets like Nigeria and Ethiopia are leveraging modest
reforms into big economic opportunities. These trends all suggest that
Africa is on a path to prosperity, and that it is ripe for U.S.
investment, trade, and partnership."
In addition to its economic growth and investment opportunities, Africa has also been experiencing insurgent activity and significant security threats. Islamic terrorist cells in Mali are becoming more of a concern to the international community, as are some groups in Somalia. And, of course, Libyan extremist groups have made their presence more than known in recent weeks. On top of all this, there have been issues with narcotics trafficking and other black markets.
According to the article, President Obama's policies and approach have largely neglected Africa as both an area of security concerns and economic growth. Surprisingly, the President has only spent a mere twenty hours on the continent--all occurring during his visit to deliver a speech on democracy in Ghana. Previous presidents, like Bill Clinton and George W. Bush, implemented trade-friendly legislation, initiatives for malaria and AIDS relief, and the Millennium Challenge Corporation, which developed compacts with several African countries to promote business and economic growth. Obama may have attempted to introduce similar policies, but these have largely ended up as low priorities and have been abandoned. For instance, the 2010 Global Climate Change Initiative, which "sought to expand renewable energy in Africa," has been overlooked, as well as the Global Health Initiative. Additionally, the position of USAID's assistant administrator to Africa was left unfilled for three years during Obama's administration, and the USAID administrator position was left unfilled for one.
Now, while this article was certainly interesting, it was unapologetically of one view, and I remain skeptical about some of the comparisons it draws. I would not pretend to know all U.S. efforts that have taken place in Africa, nor to know why they have or have not seen success under a given president. To me, by far the most interesting point made by Mr. Moss was that Africa remains largely overlooked as an avenue for new investments, partnerships, and mutual benefit. America's prevailing view of Africa as an impoverished and corrupt part of the world is now coming back to haunt it.
Before it is too late, the U.S. needs to fix this mistaken conception and ensure that it does not overlook or turn down opportunities for positive growth. Efforts in both the public and private sector to reach out to Africa would likely improve domestic economic growth and boost Africa's competitiveness in the global market. Perhaps just as important, however, is the need to keep pace with China. Already, China has set up huge investments in several African countries, and has begun to implement large projects for roads, energy, and business. With several important, burgeoning economies cropping up in Africa, there is no reason for the U.S. to overlook opportunities to expand its own activities and support growth elsewhere.
According to Moss, "Secretary Clinton, in a veiled attack on Beijing’s activities in Africa,
claimed in August that the United States brings 'a model of sustainable
partnership that adds value, rather than extracts it.' But instead of
lecturing African countries to beware, the administration should reflect
upon why China seems to be so attractive to the region as it gains
self-confidence. Today’s Africa does not want charity. It seeks more
investment and a measure of respect. China-bashing might be good
political theater, but it makes for ineffective policy."
As many key players in the global economy flounder and weaken, the need to re-structure investment and trade has become more prominent. This past week, a piece in The Wall Street Journal noted the grim spreading of economic malaise from the Euro zone to U.S. corporations. Financial woes in several European countries have caused a decrease in corporate earnings, slapping even strong companies like Whirlpool with $35 million in regional operating losses. Already, businesses like General Motors, 3M, and Caterpillar have experienced falling sales in Europe, and Kimberly-Clark has elected to stop selling diapers altogether in Western and Central Europe. Notably, the Huggies producer says it will still distribute in Italy--presumably capitalizing on demand stemming from the still growing numbers of Berlusconi's illegitimate children. Or, perhaps, smartly offering Italians an alternative waste disposal method when their economy goes down the toilet.
At any rate, recent reports have indicated a clear and present slowdown across various sectors of industry. As the dollar strengthens against the Euro and European markets and demand falter, U.S. producers are struck with significant recoil force. With such a grim outlook in the Euro zone, many believe that things will get worse before they get better.
Keeping this in mind, perhaps it is time to re-allocate some resources and at least reconsider developing partnerships with small but promising economies. Although many African countries have a long way to go before they match the stability and financial might of Europe, current statistics suggest that increased investment and economic partnership with the U.S. would be mutually beneficial. Rather than clinging to slowing trade relationships, perhaps the U.S. government private businesses should reconsider programs and efforts in developing African countries. Not only would the continent welcome improvements in disease management and infrastructure, but it would also offer favorable business conditions and an entirely new market. Establishing these ties would not only enrich the U.S. and African economies, but also would allow the U.S. to be a financial presence in an area that is currently monopolized by Chinese investment. With its diverse resources, people, and recent economic growth, today's Africa must not be overlooked or misunderstood by Americans. If this country is to remain competitive and capable--as well as a force for global good--it must always be ready to do business with the "little guy."
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