UNIVERSITY OF PENNSYLVANIA - AFRICAN STUDIES CENTER
USA: CFR Task Force Statement
Date distributed (ymd): 970602
Document reposted by APIC
Task Force Statement (Excerpts)
The following excerpts are taken from a statement by a Task Force of The Council on Foreign Relations, Inc.
The council takes no institutional position on policy issues and has no affiliation with the U.S. Government. This report is the sole responsibility of the task force.
The Statement of the Task Force reflects the general policy thrust and judgments reached by the group, although not all members necessarily subscribe fully to every finding and recommendation in the Statement being released today. Some members may choose to register additional views in the final published document.
For further information about the Council or this Task Force, please contact the Public Affairs Office, Council on Foreign Relations, 58 East 68th Street, New York, NY 10021.
A copy of the full task force statement will be available shortly on the Africa News web site (http://www.africanews.org). It is also available from task force rapporteur Marilyn Gayton, African Studies Program, Council on Foreign Relations, 2400 N St. NW,Washington, DC 20037; Tel: 202-862-7793; Fax: 202-862-7786; E-mail: firstname.lastname@example.org.
Promoting U.S. Economic Relations with Africa
Statement of an Independent Task Force
Frank Savage and Peggy Dulany, Co-Chairs
Salih Booker, Project Director
Sponsored by the Council on Foreign Relations
May 22, 1997
I. Introduction and Summary
Significant positive developments in Africa have recently created a sense of economic and political renewal throughout much of the continent. Over two-thirds of African countries are implementing economic policy reforms that emphasize growth, private sector development, and greater openness to the global economy. Aggregate growth rates for these 35 African countries in 1995 and 1996 averaged 5 percent, more than twice the rates of the previous decade. A new generation of leadership in Africa is promoting a reform agenda that offers important opportunities for rapid economic growth and increasing African countries' participation in the global economy. Now that an increasing number of African countries are becoming strong candidates as potential trade and investment partners, the United States should be at the forefront of the industrialized world in pursuit of these new opportunities.
Recognizing the favorable economic and political trends occurring in most African countries, the Council on Foreign Relations -- while taking no position on the subject as an organization -- sponsored an independent Task Force of distinguished private citizens, committed to strengthening American ties with Africa, to make recommendations on how best to advance mutual U.S. and African interests in the sphere of economic relations.
Despite the renewal in Africa and the quiet expansion of U.S. economic interests on the continent, the prevailing perceptions of Africa's potential remain overwhelmingly negative within parts of the policymaking and business communities, and among the larger American body politic. In the minds of many Americans, economic and political crises in a handful of traumatized countries have tended to obfuscate the impressive growth and political turnarounds occurring in many other African countries. Consequently, the Task Force believes that new opportunities to increase economic ties with Africa will require considerable Executive Branch leadership if they are to receive the attention and support they deserve.
The Task Force concludes that the U.S. needs a new economic policy for Africa which integrates trade and investment, aid, and debt reduction in a coherent manner aimed at expanding mutually beneficial economic ties. The Task Force notes with approval the recently increased attention given to African trade and investment issues by both the Congress and the Administration. However, the Task Force believes that legislative and executive initiatives fall short of offering a new economic policy for Africa that is as comprehensive as is warranted.
New policy must more aggressively promote trade and investment and involve all relevant government agencies, while simultaneously strengthening our development assistance programs with those African countries demonstrating the strongest commitment to economic and political liberalization and poverty reduction. It must also promote the extinction of outstanding concessional bilateral debt and a more rapid application of the new debt reduction initiative of the World Bank and the International Monetary Fund (IMF). Finally, a new policy must include the payment of outstanding U.S. commitments to those international organizations whose programs are critical to progress in Africa, as well as a willingness to work to improve the performance of these organizations.
The Task Force calls on the President and the Secretaries of State, Commerce, and Treasury, along with the U.S. Trade Representative and the Administrator of USAID, to focus greater attention and provide stronger collective leadership on new initiatives which transform the nature and content of U.S. economic policies toward Africa. The Task Force calls upon Members of Congress to provide the Administration with the resources and support it will need to begin a new era of cooperation with an increasing number of African countries.
The Task Force is convinced that a new U.S. economic policy toward the countries of Africa should have as objectives, the following:
* Increase U.S. two-way trade with African countries and American direct investment in Africa
* Increase and strengthen U.S. development assistance in reforming countries to support sensible macro-economic policies and to help create conditions which will attract even greater investment, and produce greater trade
* Improve debt reduction as an important tool for restoring the credit-worthiness of African countries committed to economic and political liberalization and poverty reduction
* Strengthen international cooperation in support of development in Africa
II. Africa Today
Since the dawn of this decade Africa has been experiencing profound social, political and economic changes that are carrying African countries into the new millennium with greatly improved prospects for economic development and growth. This renaissance is taking place amidst equally dramatic changes in the global political economy, and portends important opportunities for African nations to deepen their participation in the international system in numerous and mutually beneficial ways. The positive trends -- of democratization, economic reform, and settlement of long-standing conflicts -- characterize the present era as the most promising period since the onset of African independence 40 years ago. While the continent's continuing problems should not be understated, it is evident that we are witnessing the inception of Africa's second independence.
A failure to fully appreciate the economic aspects of this continent-wide renewal and their bearing on Africa's security and political interests will result in lost opportunities to maximize and sustain positive change in ways benefiting not only African nations, but the U.S. and the larger global community as well. In terms of America's national interests, it should be self-evident that as we become more dependent on the expansion of world trade for our own economic well-being, the potential for significant growth in Africa -- resulting in substantial new trade and investment opportunities at high rates of return -- merits aggressive U.S. economic engagement with the continent.
III. U.S. Economic Interests in Africa
U.S. trade with Africa is already considerable. For example, in 1996, U.S. trade with the 12 countries of Southern Africa totaled over $9 billion, a level comparable to trade with the 15 Republics of the former Soviet Union combined. Significantly, U.S. exports to Africa have grown over 20 percent a year in recent years. In 1995, U.S. businesses increased their exports to Sub-Saharan Africa by 23 percent to a total of $5.4 billion, and in 1996 that figure rose to $6.1 billion. Nevertheless, the U.S. market share in the region -- at 6.7. percent -- lags behind Japan's 7.2 percent, and well behind the 30 percent share enjoyed by the European Union. Moreover, with imports from the region totaling $15.2 billion, the U.S. still runs a significant trade deficit while most of our European allies maintain a trade surplus with the continent.
IV. U.S. Economic Policy Toward Africa
During the first four decades of Africa's independence from colonialism, American foreign policy toward the continent was overwhelmingly influenced by global competition between the U.S. and the former Soviet Union. Africa's economic development interests as well as American economic interests in Africa were largely marginalized because of the primacy of the Cold War. The end of the Cold War has led some policymakers to incorrectly conclude that there are no compelling reasons for continued U.S. economic engagement in Africa.
Until recently, U.S. economic policy toward Africa has depended on the provision of aid as the principle instrument for advancing U.S. interests. Though subordinate to Cold War imperatives, development concerns have also been a part of the motivation for U.S. aid to Africa. Whereas in the 1960s, the focus was on "promoting growth," the decade of the 1970s witnessed a shift in emphasis to poverty reduction and meeting "basic human needs". During the 1980s, aid predominantly focused on support for "structural adjustment," or stabilization programs, and trade liberalization to encourage economic recovery and growth. In the 1990s, aid has since shifted to promote good governance and political democratization as a precondition for economic development.
More recently the Clinton Administration has stated that the primary goal of U.S. economic policy toward Africa is to support sustainable development and to quicken the pace of that development, to boost U.S. trade and investment. In many ways, sustainable development embraces all of the primary objectives of the preceding decades and represents a better and more integrated understanding of Africa's development challenges.
But regardless of the particular orientation of U.S. economic policy toward Africa over the years, its effectiveness has always suffered from the low priority it received within the prevailing foreign policy agenda and within the foreign policy bureaucracy.
Moreover, by limiting economic relations with Africa to those of aid-donor and aid-recipient, instead of promoting real partnerships utilizing a full range of aid, trade, investment and debt management instruments, the U.S. wrongly casts Africa as a region of little economic significance or potential.
Frustrated by this legacy and cognizant of the economic dynamism now manifesting itself on the continent, legislators recently introduced proposals in the Congress which encourage reorienting U.S. economic policy by promoting American private sector involvement in Africa and increasing the role of trade and investment as vehicles for supporting African economic development.
At the same time, proposals to restructure and reduce the U.S. foreign aid program raise serious questions about the future of U.S. aid to Africa (with the exception of Egypt). While economic assistance to Africa was regularly undercut by Cold War geostrategic and political issues, thereby retarding sustainable development, the post-Cold War period has been characterized by a sudden dismissal of development assistance on the grounds that it has achieved little positive development impact. This trend discounts the fact that efforts to reform aid and focus more on strengthening Africans' capacity to find their own development solutions are still in their infancy, and that aid has only recently been freed of its Cold War constraints. It also ignores the increased opportunities for more effective use of aid in countries that are implementing serious reform programs.
Unfortunately, the convergence of these developments (declining aid levels and increased interest in trade) has led to an often simplistic "trade vs. aid" debate over which is the most constructive approach for changing U.S. economic policies toward Africa. Fortunately, efforts to avoid this false dichotomy are evidenced in the revised legislation.
With the recent re-introduction of the African Growth and Opportunity Act in Congress, and the upcoming G-7 Economic Summit in Denver -- where new economic initiatives on Africa will figure prominently on the agenda -- there exists a new momentum for redefining U.S. economic policy toward the continent. The Administration is working to finalize proposals for a "Partnership for Economic Growth and Opportunity in Africa" that embraces most of the items proposed in the legislation. These developments, combined with U.S. support for the World Bank/IMF debt reduction program for Highly Indebted Poor Countries, offer key components for what should become a more integrated U.S. economic policy toward Africa.
The Task Force is convinced that a new policy promoting economic relations with Africa must be driven more effectively by the White House than in the recent past, that it must strengthen the complementarity of development assistance programs and the new trade and investment initiatives, and that it must include new human and financial resource commitments to promoting greater U.S. economic engagement in Africa. In addition, a new U.S. economic policy toward Africa necessitates both greater U.S. leadership on efforts to reduce Africa's unsustainable debt burden and payment by the U.S. of outstanding commitments to international organizations whose programs are critical to Africa's economic development.
Furthermore, to create an expanded economic partnership with the African continent of significant mutual benefit to both Americans and Africans, the President with the cooperation of the Congress must broaden the proposed "Partnership for Economic Growth and Opportunity in Africa" program to include the following elements:
[details of recommendations available in full statement]
Trade and Investment
* passage of an African Growth and Opportunity Act, (that increases African access to American markets, creates enterprise funds to mobilize greater American private sector investment in Africa, increases the number of posts within key federal agencies concerned with U.S. economic policies toward Africa, creates a U.S.-Africa Economic Forum, and initiates planning for free trade agreements with African countries or groups of countries)
Investments in Sustainable Development
The Task Force is convinced that there is a strong continuing role for bilateral development assistance to Africa and that current aid levels should be increased. Specifically, in order to reverse the decline in U.S. aid levels to Africa at a moment when it is more likely to be used more effectively than ever before, the Congress should authorize and appropriate up to $1 billion for the Development Fund for Africa and the African Development Foundation in each of the next five years. The Task Force believes that while more emphasis is needed on promoting trade with Africa and U.S. private investment in Africa, the United States must expand its sustainable development programs to help reduce poverty, to strengthen democratic governance and the rule of law, and to invest in human resource development, all of which are necessary to help Africa create the economic base needed to meet global competition for export markets and investment funds, and to sustain economic growth.
The United States must also pay outstanding American commitments to the International Development Association, the African Development Bank and Fund, and the United Nations in order to carry a fair share of international cooperation in support of African development, and to maintain leadership in shaping the global economy. ...
* a commitment to push for an accelerated, improved and flexible implementation of the Highly Indebted Poor Countries (HIPC) framework for debt relief in Africa with an emphasis on restoring the credit worthiness of strongly reforming countries.
* the period of eligibility for multilateral debt reduction should be reduced from six years to three years
* the debt sustainability threshold ratios for debt service should be lowered to 15-20 percent and for debt-to-exports to 150-200 percent
African renewal, as described earlier in this statement, while largely self-generated, will nevertheless require significant international support and enhanced development cooperation if it is to be sustained. Such cooperation is equally important to the larger international community itself. The old notions of "aid donors" and "aid recipients" must give way to more relevant concepts which emphasize partnership and encompass the full range of areas of economic cooperation including trade and investment. ...
In the U.S., the crumbling of the old conventions that sustained foreign policy throughout much of this century, and the need to redefine the national interests that will guide it into the future, should offer Africa new opportunities for greater engagement with the United States. ...
Realistically, however, this moment of opportunity could easily be lost. Indeed, the low priority that continues to be given to African affairs by Washington despite this convergence, as well as the unchanged staple of negative stereotypes of Africa that continue to predominate American attitudes toward Africa are discouraging. These factors underline the need for new and innovative efforts to address the prevailing misperceptions of Africa's progress and of its importance to the U.S. and the global political economy as a whole. ...
SIGNATORIES TO STATEMENT OF THE TASK FORCE
* indicates member of the Task Force
# indicates individual largely concurs with report but submitted an additional view
+ indicates individual participated in discussions, but chose to be an observer or was not asked to endorse the statement because of his or her official capacity.
[Identification of the signatories is available in the full statement]
Harold M. Agnew, Kofi Appenteng*, David E. Apter, James E. Baker*, Pauline H. Baker*, John C. Beyer, Richard E. Bissell*, Salih Booker*, Zeb B. Bradford, Jr., William L. Bradley, Linda P. Brady, John D. Brewer+, Robert S. Browne*,Thomas Callaghy, Herman J. Cohen*#, Roberta Cohen is a Guest Scholar at the Brookings Institution, Julius E. Coles*, Goodwin Cooke, Chester A. Crocker, Kenneth A. Cutshaw, George A. Dalley*, Maceo N. Davis, Edwin A. Deagle, Jr., Vivian Lowery Derryck*, Joel Dreyfuss*, Peggy Dulany*, Jose W. Fernandez*, Frank E. Ferrari*, David J. Fischer, Wayne Fredericks*, William R. Ford*, Dennis Gallagher, Robert G. Gard, Henry Louis Gates, Jr., David Ginsburg, David F. Gordon*, Ernest G. Green*, Christine M. Y. Ho*, Jean Herskovits*, Eric K. Jackson*, Willard R. Johnson*, Charlotte G. Kea+, John H. Kelly, Mahesh K. Kotecha*, Carol Lancaster*, James T. Laney, Mora McLean*, Wandra G. Mitchell*, Priscilla A. Newman*, Patricia L. Rosenfield*, Michael A. Samuels*#, Frank Savage*, Daniel A. Sharp*, John Stremlau*, J. Michael Turner*, Carl Ware, Cherri D. Waters*, Jennifer Seymour Whitaker*, Irving A. Williamson+, Ernest J. Wilson, III*, W. Howard Wriggins, Andrew J. Young, George H. Young, III*, Aristide R. Zolberg.
From: email@example.com Message-Id: <199706021331.GAA05977@igc3.igc.apc.org> Date: Mon, 2 Jun 1997 09:31:02 -0500 Subject: USA: CFR Task Force Statement
Editor: Ali B. Ali-Dinar
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