Toward a Brighter Horizon for Africa
Well-directed aid can foster reform, create conditions for trade, investment
President Clinton recently announced a new trade and development initiative for Africa. Observers quickly zeroed in on what was new in this initiative: an increased use of private capital, debt relief, and the lowering of American trade barriers in an effort to bring economic growth to Africa. Some went so far as to say the trade and investment initiative represented the demise of traditional foreign assistance to Africa.Skip to next paragraph
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On the contrary, Mr. Clinton's initiative wisely combines a more focused approach to foreign assistance, with trade and investment incentives to encourage economic and political reform.
For the first time, the conditions may be right for positive change in Africa. Several of Africa's new leaders are determined to abandon approaches that were based on aid dependency. They want trade and investment to replace aid - not today, but as soon as possible.
These leaders are realists. They know that no corporation or company will help them address development challenges that are more serious in Africa than anywhere else. They know that a quarter of all African children will die before their fifth birthday from disease and malnutrition. They know that only half of all African adults are literate, fewer than 20 percent of young people attend high school, and the continent's HIV and AIDS infection rates are the highest in the world.
African leaders such as Nelson Mandela of South Africa, Meles Zenawi of Ethiopia, Afworki Isaias of Eritrea, and Yoweri Kaguta Museveni of Uganda understand that development assistance is more necessary now than ever to create the conditions needed to attract private capital and spur lasting economic growth. Foreign assistance to reform-minded governments is essential if these nations are to succeed in escaping aid dependency.
Four areas are crucial:
* Deepening reforms is a must. In Africa, even the best-performing economies remain more closed and regulated than many of their Asian and Latin American competitors. United States foreign assistance is helping African nations liberalize markets, remove institutional and legal trade barriers, and create environments receptive to investment.
* Supporting investments in health and education is a key to stability and growth. Even though population growth rates are beginning to fall in some countries, many African nations are still struggling to meet the social-service needs of populations expanding at about 3 percent a year. Building human capacity through education and better health care is the most important factor in economic development. Continued support by donors in education and health is vital until economic growth gains enough steam to allow countries to self-finance these services.
* Promoting democracy still has a long way to go. While there has been a revolution in African political structures in the 1990s, the new democracies are fragile. Foreign assistance provides essential technical and moral support as these societies build democratic institutions, respect for law, and vibrant civic cultures.
* Investing in the future is the path to hope. Three long-term trends threaten Africa's future prosperity: rapid population growth, environmental degradation, and health threats from disease such as AIDS and malaria. African governments require financial assistance to protect increasingly scarce resource bases, slow down population growth, and combat environmental decay and poverty - the root causes of disease.
The continued investment of foreign aid in Africa was the part of the president's announcement that received less attention because it wasn't new. What is new is the attitude that well-directed aid can create the conditions for trade and investment and that aid can be used strategically to foster reform. The president and Congress should be applauded for looking to the future of Africa. By combining the best abilities of America's public and private sectors, we are working toward building a relationship with Africa that will serve us well for years to come. Nowhere are the potential returns on our long-term investments greater.
* J. Brian Atwood is the administrator of the US Agency for International Development.